Chinese share prices bounce back as emergency measures take effect

Stock markets breathe a sigh of relief but analysts warn of long-term consequences of government intervention

Chinese share prices have bounced back after the latest emergency measures by policymakers to underpin the country's fragile stock markets appeared to have increased confidence.

Investors in China's markets have endured a white knuckle ride in recent weeks, with prices on the Shanghai Composite index plunging by 8.5% on Monday alone - the sharpest sell-off in eight years - as trading in many stocks was suspended. But following a second day of declines the index closed up 3.5% on Wednesday.