Aug 18 (Reuters) - China shares rebounded on Wednesday, after sharp falls in the previous session, as financial stocks bounced back on Beijing's vow to forestall major financial risks, while defence plays gained amid rising geo-political tensions.
The blue-chip CSI300 index rose 1.2% to 4,894.24, while the Shanghai Composite Index gained 1.1% to 3,485.29.
Financial chips led the gains, with the financials sub-index jumping 4.3%.
Tuesday's meeting of the Central Committee for Financial and Economic Affairs said efforts should be made to strike a balance between ensuring stable economic growth and preventing financial risks, according to state media Xinhua.
An index tracking brokerage shares jumped nearly 7%.
The market had shunned cyclical stocks like brokers in recent years, said fund manager Xiaohua Li of Harfor Funds. "Premium fundamentals of the brokerage sector cannot always be neglected by the market."
Defence shares rose, with an index tracking the sector adding 2.7% amid lingering geo-political tensions.
A sub-index tracking coal slipped 0.3%, as the state planner said on Tuesday China would curb development of projects that use large amounts of energy and have high carbon emissions.
Boshi Fund Management Co cautioned that the market will likely remain volatile going forward, citing economic slowdown and other disturbing factors.
The asset manager recommended growth stocks with good prospects, and companies that will benefit from Chinese policies.