Investors' expectations for easier policies from the central authorities sent stock indexes to a several-month high on Tuesday, with automotive, bank and property sectors leading the rally.

The CSI 300 of Shanghai and the Shenzhen A-share listings rose 1.22 percent to close at 2,192.70 points, the highest point since April 23. The benchmark Shanghai Composite Index also jumped 1.02 percent to 2,075.48 points, and turnover expanded to 98.7 billion yuan[HK Corporate Registration]($15.7 billion) from 75.7 billion yuan on Monday.

"A shares are recovering as the economy stabilizes," a report issued on Monday by Guotai Junan Securities Co Ltd said.

"The slight turbulence in the stock market during the first half of 2014 showed that investors are in agreement that the 'not as bad as expected' economy is likely to have a large-scale recovery and correction in valuations," the report said.

Leading companies in sectors with low valuations and small caps on the growth enterprise board should rebound the most, the report said.

Investors are expecting more policy easings from local and central governments in the next six months, in a bid to accomplish an annual target of 7.5 percent GDP growth.

China Business News reported on Monday that the government granted a 1 trillion yuan loan to China Development Bank to help fund subsidized housing projects. The municipal government of Wuhan, [Businesses Registration]capital of Hubei province, has abolished purchase restrictions for property over 140 square meters and has also loosened them for non-locals and high-quality talent, Xinhua reported on Monday.

Since a similar abolition by Hohhot, capital city of the Inner Mongolia autonomous region, in late June, other cities, such as Jinan in Shandong province, have followed suit.

There were also rumors of possible loosening in cities like Suzhou, in Jiangsu province, on Tuesday, making property stock valuations attractive. Poly Real Estate Co Ltd added 1.4 percent, and China Vanke Co Ltd rose 2.7 percent.

In the automotive sector, carmaker BYD Co Ltd surged 5.6 percent in Shenzhen, and Shanghai-based SAIC Motor Corp rose 1.7 percent, its highest since February 2013, as the State Council announced measures on Monday to promote electric vehicles and plug-in hybrid cars.

Another hoped-for factor, according to UBS Securities Co Ltd chief strategist Chen Li, will be[Hong Kong Company Formation & Registration] "if breakthrough reform happens in State-owned companies", that will not only allow private capital to be invested in them but also allow decision-making.

The Hang Seng China Enterprises Index grew 2.4 percent in Hong Kong, extending its biggest gain in four months. PetroChina Co and China Petroleum & Chemical Corp, the biggest Chinese oil producers and refiners, each surged more than 3 percent.