China stocks end wild session slightly lower as state funds return to prop up market

The Chinese stock markets took another wild ride on Wednesday as jittery investors sent the Shanghai benchmark index sinking as much as 4 per cent but a late rebound in blue-chip oil shares managed to help the index recover most losses and close only slightly lower.

Analysts said signs showed markets received a boost in afternoon trade from possible stock buying by government-backed funds.

The Shanghai Composite Index ended down 0.52 per cent at 2,735.56, after tumbling 4.1 per cent to an intra-day low of 2,638.30 around 1pm and bouncing back in the next two hours of trading. The benchmark index plunged 6.4 per cent Tuesday to a 13-month closing low on worries over the oil prices weakness and China’s economic slowdown.

Hong Kong’s Hang Seng index rose 1 per cent to settle at 19,052.45, tracking a broad advance in Asian markets following an overnight rally in US stocks on rising oil prices and better-than-expected corporate results.

In Shanghai, the heavily weighted PetroChina jumped 2.97 per cent to close at 7.29 yuan while state-owned refining giant Sinopec climbed 1.9 per cent to 4.36 yuan.

Among other gainers, China Minsheng Banking Corp rose 1.9 per cent to 8.52 yuan, China Merchants Bank gained 0.9 per cent to 15 yuan, and Industrial and Commercial Bank of China added 0.74 per cent to close at 4.11 yuan.

A Shanghai-based private equity fund manager, who spoke on condition of anonymity, said blue-chip oil stocks, such as PetroChina and Sinopec, often become the targets of government-backed funds to influence the stock market.