China's A-share market reopens on Monday, its first trading day of the Year of the Rat, losing heavily across the board. Photo: cnsphotos

Chinese shares bounced back on Tuesday after suffering a hefty loss the previous day, as panic over the coronavirus epidemic eased and amid government efforts to replenish liquidity.

The two mainland bourses opened lower but quickly flashed green. By the end of the afternoon session, the Shanghai Composite Index had risen by 1.34 percent to 2,783.29 points. The Shenzhen market bounced back to over 10,000 points with a 3.17 percent rally. ChiNext, the NASDAQ-style board soared by 4.84 percent. 

Cloud office shares secured a 6.08 percent rise as the coronavirus outbreak forced many companies to turn to telecommuting. Face mask and medical shares continued to soar as the country struggled to combat the deadly virus. 

Tesla became an "incubator" for the mainland after the US electric carmaker soared 20 percent in NASDAQ trading on Monday, its biggest rise in nearly seven years.

Chinese electric battery maker CATL saw its shares touch the daily trading ceiling of 10 percent after its confirmation that it would supply batteries to Tesla. Shares of Nanjing-based Informrack also touched the upper limit after announcing a similar partnership. 

On Monday, mainland stocks saw their biggest flash crash since the 2015 stock nosedive, with the Shanghai market plummeting more than 7 percent. The dive was triggered by worries over the coronavirus outbreak that gradually intensified during the Spring Festival holidays. 

But the mood has eased following government-initiated actions to replenish market liquidity and bolster market confidence. 

China's central bank injected 1.7 trillion yuan ($243 billion) into markets via reverse repo operations on Monday and Tuesday.  

IMF Managing Director Kristalina Georgieva wrote on her Sina Weibo account, China's Twitter-like social media platform, that the IMF supports China's virus-fighting efforts in financial and monetary areas. 

Some domestic securities analysts interviewed by the Global Times said that the quick rebound was within expectations as Monday's stock plunge was a one-shot correction. 

"The stock rally on Tuesday released a good signal that investor sentiment has improved, although it will still take time for confidence to be completely restored," said Yang Delong, chief economist at First Seafront Fund. 

Xi Junyang, a professor at the Shanghai University of Finance and Economics, said that the current fluctuation in the mainland stock markets has been "within the safety range." 

"The markets are unlikely to shake as much as they did on Monday, though they might edge further down if the epidemic worsens," he told the Global Times. 

He also noted that the government might soon cut the reserve requirement ratio to boost the economy, though interest rates cuts are unlikely as China's inflation level has been high and might rise further due to supply difficulties amid the epidemic.