SHANGAHI stocks rallied this morning after notching biggest fall in three weeks yesterday. The surge of media stocks offset the drop of distilleries.

The key Shanghai Composite Index edged up 0.68 percent, or 14.88 points, to 2,199.41 points. Turnover was 37.2 billion yuan (US$6 billion) by midday.

"The market is undergoing a technical rebound but the overall fundamentals are still fragile," said Chen Jian, an investment consultant at Yinda Securities.

"The market is expected to fluctuate in the beginning of the second quarter due to weak economic recovery," said China Minzu Securities in a note today.

The government's latest moves to tighten housing control and supervision of wealth management products also dampened investor sentiment, the broker said.

Media companies gained. BesTV New Media surged 6.1 percent to 19.57 yuan. Jiangsu Phoenix Publishing & Media Corp rose 3.7 percent to 7.01 yuan.

Distilleries slumped against the rising index. Sichuan Tuopai Shede Wine Co fell 5 percent to 17.87 yuan. Shanxi Xinghuacun Fen Wine Factory Co decreased 2.8 percent to 27.03 yuan. Kweichow Moutai Co shed 0.3 percent to 171.21 yuan.