BEIJING, Feb. 26  -- Chinese shares were bullish on Thursday, the second trading day after the Spring Festival break, led by financial companies, decoration, engineering construction and water conservation.

The benchmark Shanghai Composite Index edged up 2.15 percent to finish at 3,298.36 points, while the Shenzhen Component Index advanced 1.83 percent to close at 11,750.78 points.

The Hushen 300 Index, which samples about a fifth of the total stocks listed on the two bourses, climbed 2.52 percent to close at 3,566.3 points.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 0.19 percent to end at 1,880.39 points.

The financial sector led the increase with a 6.61-percent growth from the previous close, followed by the decoration sector, construction and the railway transportation sector.

The State Council, China's cabinet, on Wednesday pledged to step up fiscal policy support and strengthen targeted controls to combat downward pressure on the economy.

Hoping to activate more private investment, the cabinet said taxes on investment earnings from non-monetary assets would be levied in stages rather than a one-off collection.

"The robust growth in shares was largely driven by the news," said Gao Xiang, an analyst with CITIC Securities.

The cabinet decided to extend tax breaks to more small businesses. From 2015 to the end of 2017, companies with annual taxable income under 200,000 yuan (32,573 U.S. dollars) will have their corporate tax halved. Previously, the threshold was 100,000 yuan.