Chinese share prices closed 3.75 percent higher on Wednesday, led by oil refiners, as a sharp decline in oil prices eased concerns over rising fuel costs and inflation, dealers said.

Tumbling oil prices fueled a rally in oil refiners, airlines and other transport stocks, giving investors some respite amid fears that crude costs would hurt corporate earnings and push up prices, traders said.

The benchmark Shanghai Composite Index, which covers both A and B shares, closed up 105.60 points at 2,920.55 on turnover of 105.8 billion yuan (15.4 billion US dollars).

"Any decline in oil prices will boost Chinese stocks because inflation is currently the foremost worry in investors' minds," Capital Securities' strategist Amy Lin told Dow Jones Newswires.

Banks and property developers also outperformed as an expected slowdown of June's inflation data helped investors to alleviate fears on further monetary tightening measures.

The official Shanghai Securities News reported on Wednesday that the June consumer price index will rise around 7.1 percent, from 7.7 percent in May and 8.5 percent in April.

"Expectations of slower CPI growth in June ease concerns that the central bank will raise the interest rate again this month," said Ping An Securities' Li Xianming.

Li said the expectations will prompt investors to buy back bank and real estate stocks that have been oversold.

The Shanghai A-share index rose 111.12 points, or 3.76 percent, to 3,063.57 on turnover of 105.6 billion yuan, while the Shenzhen A-share index was up 29.14 points, or 3.24 percent, to 928.23 on turnover of 51.7 billion yuan.

Financials and real estate firms outperformed with China Vanke, the country's top property developer, up 8.10 percent to 10.01 yuan, off a high of 10.13 yuan.

Industrial and Commercial Bank of China, the country's largest lender, gained 4.48 percent to 5.13 yuan. China Merchants Bank soared 5.55 percent to 23.96 yuan and China CITIC Bank rose 4.15 percent to 5.77 yuan.

China Life Insurance soared by the 10 percent daily limit to 25.17 yuan, and Ping An Insurance jumped 8.58 percent to 43.78.

Oil majors were also strong on a pullback of oil prices. China Petroleum Chemical Corp. (Sinopec) added 4.83 percent to 10.63 yuan, while PetroChina, the biggest index component, rose 3.24 percent to 15.63 yuan.

Air China added 2.16 percent to 10.39 yuan. China Eastern Airlines was up 0.41 percent to 7.42 yuan and China Southern Airlines rose 1.11 percent to 8.18 yuan.

The Shanghai B-share Index was up 2.78 points, or 1.27 percent, to 221.00 on turnover of $ 254.9 million dollars.

The Shenzhen B-share Index added 10.55 points, or 2.23 percent, at 483.56 on turnover of 261.5 million Hong Kong dollars ($ 33.5 million ).