Chinese stocks climb as CSRC steps in again to talk up world’s worst-performing market
- The CSRC issued market-boosting comments in the morning trading session to stabilise equities
- Carmakers rally on expectations that China will halve purchase taxes to help revive car sales
China’s stocks rose for the first time in three days on Tuesday, as the securities regulator said it will improve the quality of listed companies and woo long-term investors as its latest move to talk up equities, countering concerns about an escalating war with the US.
The Shanghai Composite Index added 1 per cent on Tuesday, reversing an intraday loss of as much as 0.8 per cent, after the China Securities Regulatory Commission made a rare comment in trading hours aimed to arrest the world-beating decline on China’s stock market this year. Hong Kong’s Hang Seng Index slipped back to a down trajectory.
Ping An Insurance Group closed higher after the insurer said it plans to purchase up to 10 per cent of its shares in what would become a record buy-back in China. Beiqi Foton Motor led the upsurge among carmakers on speculation that Beijing may be planning to halve the tax on car purchases.
In a four-line statement put out on the website during Tuesday’s morning trading session, the CSRC said it will encourage share buy-backs and mergers and acquisitions, boost market liquidity by scaling back intervention in trading and guide the entry of more long-term investors. Before that, stocks were lower as the US is poised to slap tariffs on all remaining Chinese imports, which could be worth US$257 billion based on last year’s figures. Still, President Donald Trump said in an interview with FOX News that he expected to strike a “great deal” with China on trade, without elaborating.
“The CSRC is doing that to stabilise the market,” said Wu Kan, an investment manager at Soochow Securities in Shanghai. “But that’s more symbolic as it simply repeats what it always says. That may work temporarily to put a floor under the market, but the real market bottom may still be some distance from us.”
The Shanghai Composite advanced 25.95 points to 2,568.05. Still, the index was heading for a 9 per cent loss in October, the worst-performing month since January 2016.