The Shanghai Composite Index slid 1.2 percent to 3,166.62 at the close, paring a loss of as much as 4.8 percent.

Rallies for large bank and oil shares propped up the stock market, with more than 1,000 companies in the Shanghai and Shenzhen bourses plunging by the 10 percent daily limit. The official Purchasing Managers’ Index was 49.7 for August, down from 50 in July. Numbers below 50 indicate contraction.

“The manufacturing index still shows that the economy is in the process of seeking a bottom,” said Wu Kan, a Shanghai-based fund manager at JK Life Insurance. “The market is unlikely to pick up anytime soon.”

The Shanghai Composite closed near its highest level of the day for the fourth straight session on speculation state-backed funds are using afternoon share purchases to bolster the market before a World War II victory parade this week.

The SSE 50 Index of the nation’s biggest stocks rose 0.9 percent, erasing a loss of as much as 4.8 percent. PetroChina Co. and Industrial & Commercial Bank of China Ltd., the two largest members of the Shanghai index, jumped at least 3 percent.

China’s markets will be closed on Thursday and Friday.

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