Stocks advance on back of large financial firms

An investor walks past an electronic trading screen at a brokerage in Huaibei, Anhui province, Dec 2, 2015. [Photo/IC]

Stocks climbed the most in a month on Wednesday, led by a rebound of large financial companies.

The benchmark Shanghai Composite Index surged 2.3 percent to close at 3,536.91, while the Shenzhen Component Index advanced 0.9 percent to 12,186.27.

Banks surged on Wednesday, with CITIC Bank, Beijing Bank and Ningbo Bank surging by the daily limit of 10 percent. Industrial Bank, Ping An Bank and Huaxia Bank rallied more than 6 percent.

Brokerages rebounded after a week-long plunge when regulatory probes widened for alleged rules violation. CITIC Securities and Haitong Securities, two major players that earlier announced they were under investigation, gained more than 5 percent. GF Securities jumped by 10 percent.

Insurer China Life Insurance and China Pacific Insurance rallied 10 and 7.4 percent respectively.

Market has speculated that the central bank will take further move to shore up the economy, reported Bloomberg, as latest official data showed China's manufacturing activities fell to the weakest level in more than three years.

A total of 838.4 billion yuan ($131 billion) worth of stocks changed hands at the two markets on Wednesday. The outstanding balance for margin trades rose 0.3 percent as of Tuesday after a six-day decline, according to Shanghai bourse.

The CSI 300 Index surged 3.6 percent to close at 3,721.96.