China stocks closed higher in choppy trade on Tuesday as the central bank tried to stabilise the yuan after allowing it to sharply depreciate in the first week of the year, sowing confusion in global financial markets over its policy direction. Sentiment was also supported by reports that China's cabinet, the State Council, may take a more active more in financial regulation following a series of perceived misteps under the current regulatory regime.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.7 percent to 3,215.71 points, while the Shanghai Composite Index gained 0.2 percent to 3,022.86 points. Among the most active stocks in Shanghai were CN Shipbuilding, up 3.0 percent to 8.24 yuan; Shanxi Coal, down 3.5 percent to 4.94 yuan and Nanjing Steel, down 6.3 percent to 2.97 yuan.

In Shenzhen, Hebei Steel, down 2.2 percent to 3.54 yuan; Myhome, down 5.8 percent to 5.35 yuan and BOE Technology, up 0.4 percent to 2.76 yuan were among the most actively traded. Total turnover of A shares traded in Shanghai was 20.6 billion lots, while Shenzhen volume was 21.7 billion lots.

Copyright Reuters, 2016