Shanghai Composite Closes Up 32.13 Points on News of Government Support for Market Stability

Macro

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The Shanghai Composite Index closed up 32.13 points, or 0.85 percent, at 3,796.28 points today, after Chinese authorities stepped up efforts to stabilize the sluggish stock market. China Reform Holdings and China Chengtong Holdings, two large state-backed funds, increased their holdings of Chinese stocks and pledged to buy more, while state media reported that the securities regulator will meet with stakeholders to discuss measures to support capital market stability. On the same day, the People's Bank of China kept the one-year loan prime rate at 3 percent and the five-year rate at 3.5 percent for the 14th consecutive month, as expected. Banking stocks led the market higher, with ICBC up 2.25 percent and Agricultural Bank of China surging 3.44 percent, in contrast to technology stocks which fell, led by Victory Giant Technology down 7.2 percent and Huagong Tech plunging 10 percent.