The Shanghai index ended at 2,651.73, almost unchanged from Tuesday's close of 2,651.61.

The Shenzhen Component Index rose 65.17 points or 0.72 percent to 9,162.14.

Sentiment improved slightly after reports on Wednesday said that the stock market was still on track for stable and healthy development as the country's economic fundamentals remained sound.

The benchmark Shanghai Composite Index opened at 2,656.04 points, and gained 41.82 points or 1.58 percent to end the morning at 2,693.42.

However, the market talks that China Ping An Insurance (Group) Co., China's second-largest insurer, lost nearly 12 billion yuan (2.45 billion U.S. dollars) in its fund investment has sparked panic and a sell-off in the afternoon session, analysts said.

Shares were also hit by renewed investor concerns over a recent warning by China's central bank of a possible interest rate hike to cool inflation, said analyst.

These concerns combined to drive down shares of energy, real estate, banking and insurance companies.

Ping'an Insurance, saw its shares dive by the daily 10-percent limit, or 4.78 yuan, to 43.04 yuan. China Life fell 1.12 yuan or 5.03 percent to 21.14 yuan.

Shares began to recover near the close, led by the rise of agriculture, forestry and IT stocks.

 Environmental protection shares gained after the State Council, the Cabinet, on Tuesday urged government departments to strengthen energy-saving and emission reducing work.

Combined turnover was 65.4 billion yuan, also little changed from 63.56 billion yuan on Tuesday. (Xinhua)