China A-shares closed higher after a late rebound in consumer stocks and financials, with the key index back above 5,000 points, dealers said.

The benchmark Shanghai Composite Index closed up 49.87 points or 1.01 percent at 5,007.91. It ended the week down 1.65 percent.

Turnover fell to 81.63 billion yuan ($11.09 billion) from 105.09 in the previous session.

"The market returned to positive territory in late trading led by consumer stocks, with other heavyweight stocks also trimming their losses," said Zhang Qi, analyst at Haitong Securities.

"However, reduced volume indicates upward momentum is not very strong."

The Shanghai Composite Index hit a low of 4,860 points in the morning, extending a 2.7 percent plunge yesterday, which was the biggest one-day percentage loss since November 22, amid fears the central bank will raise interest rates as soon as today, after the market close.

China's inflation rate accelerated to its highest level in 11 years in November. The central bank is expected to raise its benchmark one-year lending rate by at least 27 basis points before the year ends, after increasing it five times this year to 7.29 percent.

"We view each correction as good opportunity for our investment. The market had overreacted to the (possibility of an) interest rate hike," said HSBC Jintrust Fund Management Co in a note.

Consumer stocks resumed their gains after yesterday's correction, with many analysts considering the ssector to be a good play against inflation, in light of efforts to encourage consumption.

Kweichow Moutai rose 15.51 yuan to 216.00 yuan. Wuliangye surged 3.81 yuan or nearly 10 percent to 42.06 yuan, and Luzhoulaojiao gained 5.60 yuan to 71.85 yuan.

China Life rose 1.93 yuan to 58.82 yuan, and China Merchants Bank added 1.18 yuan to 38.59 yuan.

PetroChina, the country's largest oil producer, edged up 0.02 yuan at 30.55 yuan, after briefly falling below 30 yuan in the morning.