Chinese investors agonized over underperforming stock markets this year but are hoping for better rewards in 2013 as analysts predict on economic recovery and market reforms.

The benchmark Shanghai Composite Index closed with a 3.17 percent tick-up, rallying 1.61 percent on the last trading day of 2012 to 2269.13 points.

However, the index remained one of the worst performers in the world, compared with Japan's Nikkei 225, which surged nearly 23 percent in 2012, and the Standard & Poor's 500 on Wall Street that saw an increase of more than 11 percent.

Nearly two thirds of netizens surveyed by China's largest portal website Sina.com as of 4:30 p.m. Monday said they lost more than 5 percent of their stock investment in 2012.

"The stock market had a bullish run on the last day of 2012. I hope it keeps the good momentum and makes up the ground lost in 2013," wrote Xixigongzhu88, a user of China's Twitter-like service Sina Weibo.

Both investors and analysts have complained about anaemic corporate earnings, rampant insider trading and frequent initial public offerings (IPOs) as China's economy slowed for seven quarters consecutively.

But many sense a turnaround next year, expecting the economy to improve and authorities to be more reform-minded.

Nearly 95 percent of people predict the benchmark Shanghai index to remain above 2000 points in 2013 and over 60 percent think it will stand above 2,500, according to the Sina.com survey, which attracted more than 33,000 participants.

The structural transition of China's economy and the government's focus on urbanization, growth quality and residents' income will produce good returns for stock investors next year, said Tang Hua, investment manager at Bosera Asset Management (International) Co., Ltd..

Auto shares as well as stocks of home appliances, medicine, food and beverages may benefit from economic development in 2013, Tang forecasted.

Recent economic indicators such as industrial output, manufacturing activity and retail sales showed the economy is gathering momentum despite weak trade and curbed property investment.

Data released by HSBC on Monday showed that the purchasing manager's index (PMI) for the manufacturing sector rose to a 19-month high of 51.5 in December.

The Chinese economy is on the track of recovery while the overall valuation of companies' shares is at a relatively low level, according to analysis from Yinhua Fund Management Co., Ltd..

The Shanghai Composite Index has tumbled by more than 60 percent from its a record high seen in 2007.

Investors also look to more reforms by regulators to solve some problems of the market mechanism and boost their confidence.

The delisting of large numbers of junk shares and slower approval of IPOs were the top two bonuses most expected in 2013 by the netizens surveyed by Sina.com.

Stock delisting has been uncommon in China, making it hard for investors to withdraw investment in worthless shares. Massive IPOs are another target of blame as they strain the already inadequate fund supply.

The China Securities Regulatory Commission (CSRC) has launched reforms on those respects since its new chairman Guo Shuqing took the helm in October 2011, but substantive progress is yet to be made.

Meanwhile, some remain cautious about the challenges faced by China's economy and the pressure on listed firms' profits, according to Morgan Stanley Huaxin Fund Management Co., Ltd..

A lukewarm property sector, unsustainable investment in infrastructure and piling local government debts may all contribute to drag the economy down in 2013, the company said.

"It's better to stay away from such speculation work. I'd rather withdraw my money from the stock market and put it into something profitable," a netizen identified as Tiandigeyi1945734907 wrote on Sina Weibo on Monday.