China stocks rally after economic chief, financial and regulatory institutions step in to underline economy’s resilience
- The rally came after Vice-Premier Liu He, China’s economic tsar, said the stock market “is becoming the market with the most investment value” in the world
Shares listed in China on Friday rallied the most in more than two months after the country’s vice-premier, central bank governor and financial regulatory institutions stepped in to calm investors amid its worst stock rout in about four years.
The benchmark Shanghai Composite Index surged by 2.6 per cent, or 64.05 points, to close at 2,550.46, its biggest one-day gain since August 7. It pared the week’s losses to 2.2 per cent, narrowing down from a 7.6 per cent slump last week.
The Shenzhen Composite Index, comprised mostly of smaller companies, climbed 2.6 per cent, or 31.81 points, to 1,263.81, while the Nasdaq-style ChiNext Index jumped by 3.7 per cent, or 44.86 points, to 1,249.89.
The rally came after Vice-Premier Liu He, China’s economic tsar, said the country’s stock market “is becoming the market with the most investment value” in the world, with “bubbles shrinking significantly”, in an interview with state media, including People’s Daily.
The heads of the People’s Bank of China, the China Banking and Insurance Regulatory Commission and the China Securities Regulatory Commission also said on Friday they would roll out measures to ensure the healthy development of the market, and help listed private companies caught in a liquidity squeeze.
“The speeches and measures to prop up the market have lifted sentiment temporarily,” said Kingston Lin King-ham, director at securities brokerage AMTD.