The Shanghai Composite Index posted the biggest intraday jump since March 2009 and volumes 76 per cent higher than the 30-day average, despite no news of note.
Chinese officials are looking into what happened, with some traders speculating it could be government intervention to support the markets or a trading error. The bourse said it was operating normally after stopping trading for the midday break.
The index later pared most of its gains, but remains around 0.8 per cent up.
The Hang Seng was dragged up by the gains, although it too offset most of the rise in afternoon trading.
Asian shares had started off the session suppressed after surprisingly good US jobless claims figures prompted fears that the Feederal Reserve could begin paring back its stimulus imminently.
The Nikkei was held low both by fears from the winding down of quantitative easing in the US and assertion from government officials – including the chief cabinet secretary Yoshihide Suga - that prime minister Shinzo Abe is not planning to lower the corporate tax rate as widely reported.
The FTSE is expected to open down this morning, extending yesterday's losses from US fears.
“Fat Finger” spike in Chinese market (5% jump, see pic) does little to lift FTSE, forecast for a -20 start at 6463. pic.twitter.com/7qLzqs7NFP— David Jones (@DavidJones_IG) August 16, 2013
Key events today:
Eurozone consumer price index for July at 10:00. Expected to remain at 1.6 per cent year-on-year and to fall from 0.1 per cent to -0.5 per cent month-on-month.
US housing starts for July at 13:30. Expected to increase from 836,000 to 900,000 month-on-month.
US building permits for July at 13:30. Expected to fall from 911,000 to 900,000 month-on-month.
US Reuters/Michigan consumer sentiment index for August at 14:55. Expected to increase from 85.1 to 85.5.