China’s stocks rose, erasing this week’s loss for the benchmark index, as speculation grew the government will take more measures to stem a $ 3.4 trillion market rout.
The Shanghai Composite Index climbed for the first time in three days, adding 2.3 percent to 3,744.21 at the close. Gains were led by technology and industrial companies. China Securities Finance Corp., the government agency mandated to buy stocks to bolster the market, is seeking access to an additional 2 trillion yuan ($ 322 billion), said people with knowledge of the matter.
The Shanghai gauge has followed up a plunge of more than 30 percent with a 6.8 percent rebound since the July low as authorities took unprecedented measures to shore up markets. Investor interest remains tepid, with trading values in Shanghai falling to the lowest levels since March on Thursday and Friday’s volumes slumping 40 percent below the 30-day average.
Source : Bloomberg
China’s benchmark stock index closed up 2.41 percent on Monday in a day of rollercoaster trading after authorities unveiled an unprecedented package of measures designed to shore up a plunging market.
But the market had plunged almost 30 percent over the three weeks to Friday, prompting the government to intervene over the weekend on concerns the slump could threaten the broader economy.
On Sunday, the government said the central bank would provide funds through the state-backed China Securities Finance Co. to “protect the stability of the securities market”, according to exchange watchdog the China Securities Regulatory Commission (CSRC). It gave no amount but state media said the funds would be used to “revive” the bourse.
The Shanghai Composite Index jumped 88.99 points to 3,775.91 on turnover of 943.4 billion yuan ($ 154.2 billion) on Monday. It surged 7.82 percent at the open but fell as much as 0.92 percent during the day.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, lost 2.70 percent, or 56.63 points, to 2,041.85 on turnover of 609.1 billion yuan. It fell as much as 5.53 percent, wiping out an earlier gain of 6.55 percent.