Policy measures to bolster share prices

While the factory sector has rebounded and the Chinese economy stabilized closer to the government's 7.5 percent growth target, it appears that more stimulus is in the cards, Barclays said in a report issued last week, predicting that more policy easing, including interest rate cuts, is "unavoidable" in the second half.

The Shanghai Composite Index has fallen more than 4 percent year-to-date, after retreating 11 percent in 2013, making it the worst-performing market in the world.

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The SCI recovered slightly by 0.1 percent to 2,050.38 on Tuesday, and turnover expanded to 83.5 billion yuan ($13.5 billion) from 80 billion yuan on Monday, extending a positive opening for the second half of the year. Some optimists believe that the turn is just around the corner.

"China's economy is walking out of the shadow of the international financial crisis, as exports and export-related investment recovers, a scenario which had been awaited by investors in the last seven years," said Gao Shanwen, chief economist with Essence Securities.

Although the real estate industry is undergoing in-depth adjustment, "we expect sales to bottom out in the second half of the year. The possibility of large-scale collapses in the property sector appear unlikely", he said.

"The stock market will see several corrections and hit rock bottom during the third quarter. There will, however, be a rebound in the fourth quarter with domestic demand stabilizing," Gao said.

A total of 951 listed companies had released half-year earnings estimates by Sunday. Out of this, 621 companies, or 65.2 percent, are expecting to report profits, with companies in construction engineering, interior decoration, automotive and biomedicine expected to fare well, the China Securities Journal reported on Tuesday.