SHANGHAI stocks rebounded today, lifted by a spate of bargain hunting amid speculation that the market has been oversold.

The benchmark Shanghai Composite Index increased 1.55 percent, or 33.78 points, to settle at 2,218.32 points. Daily turnover was 79 billion yuan (US$12.7 billion).

"The market was undergoing an oversold rebound following a 2.6-percent slump on Tuesday but a weak turnover indicated the market remained vulnerable and would continue to fluctuate," said Chang Qing, chief analyst at Huaxi Securities.

Shenyin & Wanguo Securities said the market also advanced amid expectation that the government will introduce stimulus policies after the State-owned Assets Supervision and Administration Commission set targets of above eight-percent increase in economic output and more than 10-percent growth in profits for Chinese major state-owned enterprises.

Media firms increased after the China Securities Journal reported that the government is likely to extend the period of a preferential tax policy for the sector.

BesTV New Media surged 7 percent to 19.75 yuan. Jiangsu Phoenix Publishing & Media Corp rose 3 percent to 6.96 yuan.

Medical device producers also gained. China Resources Wandong Medical Equipment Co climbed 2.5 percent to 11.59 yuan. Shinva Medical Instrument Co increased 3.8 percent to 37.92 yuan.