China stock market jumps as Xi mulls state support
CHINESE stocks have jumped by their most for two years as President Xi Jinping weighs emergency support to lift the country’s faltering stock market.
The benchmark Shanghai Composite climbed 3.2pc yesterday, its largest one-day gain since March 2022.
China’s blue-chip CSI 300 jumped 3.5pc, marking its best trading day since November 2022. Its small cap index CSI 1000 also leapt 7pc, its most since 2008.
Meanwhile, Hong Kong’s Hang Seng delivered its biggest gain in six months, rising 4pc.
The rebound follows signals that Mr Xi is preparing emergency state intervention to shore up the stock market, which fell to a five-year low last month.
Chinese stocks have dropped on the back of the country’s stalling economy, propelled by a deepening property crisis and surging local government debts denting investor confidence.
The slump comes despite repeated interventions from Beijing, which have so far failed to boost recovery.
This includes a crackdown on short sellers, with China’s securities watchdog yesterday announcing restrictions on brokerages designed to prevent further declines in shares prices.
The China Securities Regulatory Commission on Monday warned that malicious short sellers will “lose their shirts and rot in jail”. The regulator also encouraged companies to increase their stock market value through share buybacks, regulator dividend payouts and more deal-making.
Other interventions by Chinese authorities include the country’s $1.24 trillion (£1 trillion) sovereign wealth fund buying exchange traded funds (ETFS) and bank shares in an effort to kick-start the market. The People’s Bank of China also injected a record 733bn yuan (£81bn) into the country’s banking system.
Chinese premier Li Qiang, one of President Xi’s closest allies, last month called on authorities to propose more “forceful” measures which would increase the investment value of listing businesses.
Regulators were yesterday expected to brief Mr Xi and China’s leadership on market conditions and the latest policy initiatives, Bloomberg reported.