China's securities watchdog has completed arrangements to further liberalize the country's stock markets by raising or removing the limits on investment by foreign institutional investors.

The move was welcomed by domestic stockbrokers and investors who hoped the expected inflow of liquidity could help sustain the market turnaround.

"It is good news that the authority is expanding the channels for investment, which brings hope that there will be more capital in the market," said an unnamed insider with a fund management company.