Chinese stocks rebounded sharply on Tuesday following a reverse repurchase operation worth 265 billion yuan (41.77 billion U.S. dollars) carried out by China's central bank.

The benchmark Shanghai Composite Index rose 40.81 points, or 1.97 percent, to finish at 2,115.23, led by finance, real estate and resource stocks.

The Shenzhen Component Index jumped 2.39 percent, or 203.79 points, to close at 8,743.86.

Combined turnover increased to 67.52 billion yuan (10.65 billion U.S. dollars) on Tuesday from 44.79 billion[Hong Kong Company Formation & Registration] yuan the previous trading day.

Gainers outnumbered losers by 962 to 7 in Shanghai and by 1,516 to 12 in Shenzhen. Nearly 50 stocks jumped by the 10 percent daily limit.

The People's Bank of China initiated reverse repurchase agreements on Tuesday via open tendering to ease liquidity through banks. Analyst expected the central bank to continue the operation to ease the cash crunch.

Brokerage shares led the gains. Industrial Security Co. surged by the 10-percent daily limit to close at 10.38 yuan per share. Western Security Co. nearly reached the limit at its peak to finish at 14.76 yuan per share, up 6.42 percent.

Real estate stocks also rose. Shanghai Xinmei climbed by 6.58 percent to finish at 6.48 yuan per share, [company registration in Hong Kong, Hong Kong company incorporation]and Tianjin Songjiang Co. gained 5.46 percent to finish at 3.67 yuan per share.

Coal stocks also led the rises, as Heilongjiang Heihua Co. jumped by the daily limit to finish at 7.52 yuan per share. China Molybdenum Co. surged 221 percent to close at 9.63 per share Tuesday, its first trading day on the Shanghai Stock Exchange.