The blue-chip CSI300 index rose 0.5 per cent, to 3,747.88 points, while the Shanghai Composite Index added 0.4 per cent to 3,244.86 points.
With the gains, the main indexes have erased losses early this week when investors panicked amid a sell-off in start-ups.
In contrast, the tech heavy start-up ChiNext is down 3.3 per cent this week as investors shun small-cap firms that feature dim performances and higher valuations. On Thursday, the index edged up 0.2 per cent.
Ma Wenyu, strategist at Shanxi Securities, said earnings of cyclical sectors such as mining and steel will keep improving as Beijing steps up “supply-side reforms” to reduce excess capacity.
“State-sector restructuring is expected to provide an additional market catalyst,” Ma said.
Construction companies Guangxi Liugong Machinery Co , XXMG Construction Machinery and Zoomlion Heavy Industry have forecast robust earnings growth, helped by government infrastructure investment.
China will announce a new batch of “mixed-ownership reforms” in state-owned enterprises (SOEs) in the third quarter, the official Shanghai Securities News reported on Thursday.
Most sectors gained, led by real estate and consumers stocks, as investors expanded their search for blue-chips still attractively priced.