Chinese stocks saw drastic fluctuations Wednesday on fragile market sentiment as authorities signaled continued efforts to correct irregularities in the financial market.

The benchmark Shanghai Composite Index managed to finish in positive territory, closing up 0.12 percent at 3,247.67. The Shenzhen Component Index went down 0.54 percent to end at 10,297.34.

Total turnover on the two bourses stood at 460.7 billion yuan (about 68.25 billion U.S. dollars).

The ChiNext Index, which tracks China's NASDAQ-style enterprises, lost 0.4 percent to close at 1,681.31.

Investor sentiment remained cautious as authorities signaled resolve to strengthen oversight in the finance industry.

In a meeting of the Political Bureau of the Communist Party of China Central Committee on Monday, policymakers promised to make the financial sector better serve the real economy and guard against systemic financial risk.

On Wednesday, China's State Council announced that major state-owned enterprises would complete corporate system reform by the end of 2017 as part of efforts to overhaul inefficient state companies, but the much-awaited move received muted reactions from the capital market.

Bucking the downbeat sentiment, shares in the rare earth permanent magnet industry showed strong performance, with China Northern Rare Earth High-tech surging 8.69 percent to close at 15.14 yuan per share.