Chinese stocks rebounded around 6 percent on Thursday, as Beijing's increasingly frantic attempts to arrest a sell-off that has roiled global financial markets finally appeared to gain some traction.
In the most drastic step yet to prop up the market, China's securities regulator banned shareholders with large stakes in listed firms from selling. The banking regulator said separately it would allow lenders to roll over loans backed by stocks.
By the close of trading, the CSI300 index of the largest listed companies in Shanghai and Shenzhen had raced up 6.4 percent, while the Shanghai Composite Index bounced 5.8 percent for its biggest daily percentage gain in six years.
China's malfunctioning stock markets remained semi-frozen, however, with the shares of around 1,500 listed companies - or around $2.8 trillion of stock - suspended, and some analysts said it was too early to call the endgame.
"The market sees some positive signs today," said Du Changchun, analyst at Northeast Securities in Shanghai. "But it is far from calling it a victory for the rescuers as more than half of listed companies are not trading."
More than 25 percent has been knocked off the value of Chinese shares since mid-June, and for some global investors the fear that China's market turmoil will destabilise the financial system is now a bigger risk than the crisis in Greece.
"We are inclined to believe that Beijing will escalate policy responses until they start working," said economists at Credit Suisse in a research note.
"If market conditions do not stabilize, we expect a statement of 'whatever it takes' from the Chinese government, given that social stability is at stake and financial systemic risks are evident."
The United States has voiced worries the stock market crash could get in the way of Beijing's economic reform agenda.
The plunge in China's previously booming stock markets, which had more than doubled in the year to mid-June, is a major headache for President Xi Jinping and China's top leaders, who are already grappling with slowing growth.
Beijing, which had made handing a larger role to market forces a centrepiece of its economic reforms, has responded with a battery of support measures, including an interest rate cut, suspension of initial public offerings and enlisting brokerages to buy stocks, backed by cash from the central bank.
"The government will be able to stabilise the market because they have a lot of tools in the toolbox," said Christopher Moltke-Leth, head of institutional client trading at Saxo Capital Markets.
"But it is concerning that the Chinese government doesn't allow market forces to work, and that's something China must change over time."
The Global Times, an influential tabloid published by the Communist Party's official newspaper, invoked the "national team" in an editorial rallying support behind the authorities' efforts to arrest the slide.
"While there are disaster victims everywhere in China's stock market, the other scene is that the 'national team' is truly taking action," the paper said.
The China Securities Regulatory Commission (CSRC) said on its website late on Wednesday that holders of more than 5 percent of a company's stock would be barred from selling for the next six months.
The CSRC, which warned on Wednesday of "panic sentiment" gripping a market dominated by ordinary retail investors, said it would deal severely with any shareholders who violated the restriction.
The prohibition is unlikely to have much impact on foreign investors. No Qualified Foreign Institutional Investor (QFII), one of the main channels of foreign investment in China, holds more than 5 percent of a Shanghai or Shenzhen listed company. Foreign investors with more than a 5 percent stake in Chinese firms are all strategic investors.
As the daily barrage of official measures to prop up the market continued, the banking and insurance regulators announced a series of moves to ease margin lending requirements and terms on stock-backed loans.
In the latest salvo against short sellers, who bet on falling prices, official news agency Xinhua said police were investigating suspected "malicious" selling of shares. The probe showed that the authorities would "punch back" with a "big fist" against illegal activities, Xinhua said on its microblog.
China's stock market is still smaller than those of many developed countries relative to GDP, and equity financing only accounts for a small portion of companies' capital funding.
"Even if the sell-off in Chinese mainland equities continues for a while, we doubt it will have a major adverse effect on China's economy," David Rees, economist at Capital Economics, wrote in a note.
Nevertheless, commodities that are sensitive to the outlook for the world's second-biggest economy have been hit, with copper prices touching a six-year low on Wednesday and iron ore tumbling to a 10-year low.