Chinese shares made their biggest daily gain in six years Thursday, restoring confidence in Beijing’s suite of attempts to rescue its struggling stock market.
In Tokyo, the Nikkei 225 index recovered from yesterday’s 600-point-plus plunge with a gain of 117.86 points, or 0.6%, to 19,855.50,
In Hong Kong, the Hang Seng Index regained 876.23, or 3.7%, to 24,392.79, after Wednesday’s collapse of more than 1,000 points, the biggest one-day gain for the index in three months. A gauge of Hong Kong-listed Chinese companies known as H-shares, advanced 3.1%.
CHINA
In China, the CSI 300 reacquired 234.59 points, or 6.4 %, to 3,897.63, having lost around a third of its value in the past month.
Some companies that had halted trading of their shares lifted suspensions, and their stock prices immediately rose by the maximum 10%. These include Hangzhou Iron & Steel Co., Zhejiang Huahai Pharmaceutical Co. and Leshi Internet Information and Technology Corp. Beijing. A total of 1,473 companies, or 51.1% of all stocks on the Shanghai and Shenzhen markets, remain suspended.
The gains also follow a report by state-run Xinhua News Agency that Chinese police had visited the China Securities Regulatory Commission to investigate “malicious short selling,” a move widely interpreted as another stab at arresting the selloff.
Regulators have increased scrutiny of short selling in the wake of China’s recent stock decline, which wiped out roughly $4 trillion U.S. in value from Chinese equities. Margin trading allows investors to borrow stocks from brokerages to short shares, or bet that the prices will fall.
China’s freely traded offshore yuan was flat at 6.208 per U.S. dollar, after hitting a four-month low Wednesday. China’s domestic bonds also stabilized following Wednesday’s selloff, with the benchmark 10-year central government bond yield falling 0.05 percentage points to 3.435%. Yields fall when prices rise.
Whether Beijing’s moves are enough to reverse a broader selloff, closing in on its fourth week, remains unclear. China’s outstanding margin loans fell to 1.5 trillion yuan ($241.7 billion U.S.) as of July 8, down from 2.27 trillion yuan at its peak on June 18, according to data provider Wind Info. But some say the unwinding of margin loans — one of the main triggers for the recent spate of volatility — is still far from complete.
Investors worry that a shock to the world’s second-largest economy could have broad repercussions, weighing on demand for goods and services broadly, and pinching global companies that are closely tied to Chinese growth. China is one of the world’s largest consumers of oil, metals and food.
Copper, often seen as a barometer for the global economy, fell this week to a six-year low on concerns of China’s slowdown. Crude-oil prices recovered Thursday, but have been weak because of concerns about oversupply.
In other markets
The Taiex index in Taiwan subtracted 61.98 points, or 0.7%, to 8,914.13
In Korea, the Kospi index recouped 11.60 points, or 0.6%, to 2,027.81
In Singapore, the Straits Times Index slid 17.59 points, or 0.5%, to 3,267.40
The NZX 50 slipped 30.26 points, or 0.5%, to 5,737.44
The ASX 200 Index inched up 1.45 points to 5,470.97
