The last time the central bank made such a concerted easing effort was back in late 2008, at the height of the global financial crisis.

The market seemed to finally be placated following news on Monday night that the country's pension fund has got the nod to go into the stock market and repeated assurance from the securities regulator that the stock market is still stable despite fluctuations.

The pension fund's managers can invest as much as 30 percent of its total assets in the stock market. This is a big sum, given that outstanding contributions to the fund stood at 3.06 trillion yuan (around 500 billion U.S. dollars) at the end of 2014.

The China Securities Regulatory Commission said on Monday night that risks from margin trading were controllable. On Friday, the outstanding volume of margin trading stood at 96.5 billion yuan, 4.3 percent less than two weeks ago.

The Securities Association of China said on Tuesday afternoon that the current over-the-counter share financing worth 500 billion yuan in the stock market would be allowed to stay, though it forbade any more such irregular financing.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, came in out of the cold on Tuesday as well, up 6.28 percent to end at 2,858.61 points.