SHANGHAI, March 6 (Reuters) - China's stock market rebounded in heavy trade on Thursday, led by a nearly 8 percent jump in Ping An Insurance after shareholders approved its controversial plan for an equity issue that could raise some $17 billion.

Both the market and Ping An <601318.SS> had been depressed since mid-January by the insurer's fund-raising plan, as investors worried the market might not be able to absorb the massive issue and that other big companies might follow suit with cash calls.

Wednesday's shareholder approval had already been priced in to a large degree, so many investors saw little room for further falls in the market, over the short term at least, and were willing to bet on a rebound, analysts said.

The Shanghai Composite Index <.SSEC> ended up 1.59 percent at 4,360.986 points, but it was well off its intra-day high of 4,427.498.

Gaining stocks in Shanghai outnumbered losers by 507 to 381, while more than a dozen Shanghai A shares rose their 10 percent daily limit. Turnover in Shanghai A shares swelled to 132.8 billion yuan ($18.68 billion) from Wednesday's 113.3 billion yuan.

($1 = 7.11 yuan)