The Shanghai Composite, one of China’s leading stock indexes, has seen its highest daily spike in more than two years following signs that the government will step in to support battered equity markets.
It closed up 4.1%, its biggest one-day rise since March 2016.
The moves extend a rally that began on October 19 and after investor confidence surged on assurances from Beijing.
Stocks had been falling as China’s economic growth continued to stutter.
On October 19, top Chinese financial officials – including economic adviser Liu He and the heads of the securities and insurance commissions – issued a statement to buoy investor sentiment in bruised markets.
Over the weekend, the Chinese government published a draft of new rules for personal tax deductions, Reuters reports.
The moves come as China, the world’s second largest economy, faces challenges such as high debt levels and an intensifying trade war with the US.
The October 19 data showed that in Q3 2018, China’s economy grew at the lowest rate since global financial crisis, expanding by 6.5% from a year earlier.
The rate was a drop from the 6.7% pace in the prior quarter, but remains in line with the government’s full-year target of about 6.5%.
For years China has pushed to wean its economy off exports and rely more on domestic consumption for growth.
At the same time, the Chinese government has been fighting to contain ballooning debt driven by a wave of infrastructure development and a housing bubble without hurting growth.
In recent months the government has taken steps to support China’s economy, including cutting capital requirements to boost liquidity and ease the slowdown.
China stock market closed down by more than 5% after several major brokerage companies announced they were under investigation.
The Shanghai Composite index ended the day 5.5% lower at 3,436.3 points – marking its biggest drop since August.
On November 26, it was announced that China’s securities regulator was investigating the country’s largest brokerage, CITIC Securities.
CITIC Securities is being probed over the possible breaking of market rules.
Rival brokerage Guosen Securities is also being investigated, and shares in both CITIC and Guosen fell by 10%, the maximum allowed in one day.
In addition, trading in China Haitong Securities shares was halted and later in the day the company also confirmed it was under investigation.
Chen Xingyu, an analyst at Phillip Securities, told the AFP news agency: “The biggest reason for such a sudden drop today is because of regulator’s investigation of the top brokers. It has triggered a broader sell-off.”
Analysts said there was little information on the specific reasons for the probes other than violations of securities regulations.
Reuters reported that the Chinese regulator was urging brokerages to stop financing investors’ stock purchases through swaps in an attempt to curb leveraged trading.
A crackdown on leveraged and margin trading has been underway since the Chinese market’s dramatic plunge over the summer.
Market sentiment was already wavering ahead of a new batch of initial public offerings set to make their debut next week.
More negative economic data on the Chinese economy also did little to boost investors’ confidence, with government figures showing that industrial profits in October fell 4.6% from a year ago.
The fifth consecutive decline in profits earned by Chinese industrial companies added more fuel to concerns over a slowdown in the world’s second-largest economy.
China stock market led gains across Asia on September 16, with the Shanghai Composite closing up 4.89% at 3,152.26.
The index recovered much of the ground it lost on September 15 when the mainland benchmark index lost 3.5%.
In Hong Kong, the benchmark Hang Seng index also ended the day higher, up 2.38% at 21,966.66.
Investors shrugged off news that shares in China’s largest brokerage, Citic Securities, had fallen as much as 4%.
Photo Reuters/China Daily
The share fall came after it was announced three of the company’s executives, including its president, were under police investigation for suspected insider trading and “leaking” inside information.
Elsewhere, investors continued to remain cautious ahead of a decision by the Federal Reserve on whether or not it will raise US interest rates for the first time in nearly a decade.
Japan’s benchmark Nikkei 225 index ended up 0.8% at 18,171.60.
In Australia, the S&P/ASX 200 index closed 1.6% higher at 5,098.90, also recovering from yesterday’s losses.
South Korean shares were up despite tensions in the region, the benchmark Kospi index finished 2% higher at 1,975.45.
The Chinese markets were volatile for much of September 7 as mainland stock exchanges reopened following a four-day weekend.
The Shanghai Composite traded erratically, but closed down by 2.5% to 3,080.42 points.
The market volatility in China came as the country’s National Bureau of Statistics revised its annual economic growth rate for 2014 to 7.3%, down from 7.4%.
Hong Kong’s benchmark Hang Seng index closed down 1.2% to 20,583.52.
Mainland shares have fallen 40% since mid-June when the sell-off began, while Chinese regulators continue to take more steps to stabilize erratic trading.
China’s central bank governor, Zhou Xiochuan, told financial leaders at the G20 summit over the weekend that the markets had almost completed their correction after a steep rise in the first half of the year.
Photo Getty Images
“The stock market adjustment is already roughly in place and financial markets can be expected to be more stable,” Zhou Xiochuan said in a statement from Turkey.
Other Asian markets were mixed on September 7 despite stocks in the US, which headed lower on before weekend after US jobs figures were released.
Friday’s much-anticipated jobs figures showed unemployment fell to 5.1% last month, the lowest since April 2008.
The jobs report is the last before the Federal Reserve meets later this month to decide whether to increase interest rates.
Japan’s benchmark Nikkei opened lower on September 7, down 0.65%, but finished the day closing up 0.38% at 17,860.47.
In Australia the S&P/ASX 200 closed down 0.2% at 5,030.40, while South Korea’s Kospi benchmark index closed down 0.15% at 1,883.22 points, after closing down 1.5% on September 4.
China stock market recovered some ground on September 2, with the main share index, the Shanghai Composite, recovering from early losses.
The SSE Composite index came back from a 4% fall to close 0.2% down at 3,160 points.
Hong Kong’s Hang Seng index closed 1.2% down at 20,934.
On September 1, data suggesting China’s manufacturing sector was shrinking at its fastest pace in three years ignited a global market sell-off, resulting in US stocks closing down nearly 3%.
Chinese markets will be closed on September 3 and 4 for a holiday to commemorate the end of World War Two.
Wu Kan, a Shanghai-based fund manager at JK Life Insurance, told AFP that Beijing appeared to have been buying shares over recent days in an effort to support the market.
“But investors have lost confidence… the correction isn’t over yet,” he said.
Mainland Chinese stocks have lost nearly 40% of their value since June, despite attempts by the government and regulators to prop up the market.
Meanwhile, data showing US factory activity fell to a more than two-year low in August added to the already grim sentiment among investors.
The price of US crude oil also fell sharply – down 8% in New York overnight.
Japan’s benchmark Nikkei 225 index closed up 0.4% to 18,095.40 after leading the region’s losses in the previous session, down nearly 4%.
Australian shares closed up despite economic growth figures for Q2 2015 coming in below expectations.
The economy expanded 0.2% from the previous quarter and was up 2% compared with the same period last year.
Economists were expecting quarterly growth of 0.4% while the annual rate was forecast to be up 2.2%.
The S&P/ASX 200 was up 0.1% to 5,101.50 points – reversing earlier losses.
In South Korea, shares closed up despite government data showing that exports fell 4.3% in July, while imports rose 0.7%.
That led the current account surplus to fall to $9.5 billion in seasonally adjusted terms from a record high of $10.7 billion in June.
The benchmark Kospi index was higher by 0.05% to 1,915.22.
China stock market ended the week almost 8% lower after volatile trading that started on August 24 with shock losses and spread fear to global markets.
On August 28, the mainland’s benchmark Shanghai Composite closed up 4.8% at 3,232 points.
China’s second bourse, the Shenzhen Composite, closed up 5.4% to 1,846 points, but ended the week 9.4% lower.
Other Asian stock markets also continued their rebound, helped by a strong finish for Wall Street.
Photo AFP
Japan’s benchmark Nikkei 225 closed up 3% at 19,136 points, but the Hang Seng index in Hong Kong reversed earlier gains to close down 1%.
The Hang Seng ended the week 3.6% lower – its sixth consecutive weekly fall.
In London, the FTSE 100 also turned negative, after initially rising, to be down slightly at 6,186 points.
In Sydney, the ASX 200 finished 0.6% higher at 5,263 points.
Marking the end of a week of corporate results, the supermarket Woolworths reported a 12.5% drop in full-year profit – its first fall in almost two decades.
However, Woolworths’ shares closed 1.5% higher after the retailer announced a new chief executive in a bid to revive its fortunes.
South Korea’s Kospi index finished 1.6% higher at 1,937 points.
The recovery across Asia took its cue partly from China’s recovery, but also the strong sentiment from the US.
Shares on Wall Street rose overnight and oil prices jumped sharply after revised figures showed the US economy expanded far more than originally thought in the three months to June.
China stock market has plunged for a second day after worries over the country’s slowing growth triggered a global sell-off.
The Shanghai Composite, China’s main stock exchange, fell 7.6% on August 25 – after losing 8.5% on what state media have called China’s “Black Monday” on August 24.
It was the worst fall since 2007 and caused sharp drops in markets in the US and Europe.
Tokyo’s Nikkei index had a volatile day, closing 4% lower.
The Shanghai index ended the day 245 points lower at 2,964.97.
After decades of rapid growth, China is slowing down, and investors globally are worried that firms and countries which rely on high demand from China – the world’s second largest economy and the second largest importer of both goods and commercial services – will be affected.
Chinese shares had experienced a year-long rally – mainly fuelled by investors borrowing money to buy shares – which came to an end in June.
The government then intervened in financial markets, to try to maintain momentum in the economy.
Two weeks ago China’s central bank devalued the currency, the yuan – this raised fresh concerns that China’s economy could be in worse shape than previously thought.
A cheaper currency lowers the price of China’s exports, making them more attractive to global companies.
Elsewhere in Asia and Australia on August 25, markets beat expectations, opening lower but then returning back to positive territory: Korea’s KOSPI gained almost 1% and Australia’s S&P ASX/200 ended the day 2.7% higher.
The dollar remained weak at 119.15 yen, up from a seven month low of 118.51 yen in New York on August 24.
Commodity prices also recovered after Monday’s falls, although oil remains under pressure because of a global oversupply.
Overnight, the Europe and the US saw dramatic falls, but are expected to show some signs of recovery when they open on August 25.
Wall Street’s Dow Jones fell 6%, but then almost recovered its losses before closing 3.6% lower.
London’s FTSE 100 index closed down 4.6% as major markets in France and Germany were down by 5.5% and 4.96% respectively.
Chinese stocks were flat on August 14 as the central bank raised the trading range of the yuan.
China’s central bank set the yuan rate at 6.3975 per dollar compared to Thursday’s close of 6.3982.
The rate is set daily and allows a 4% fluctuation – over the past week, the bank had guided the yuan to a record low sparking fears of a currency war to help lagging Chinese exports.
The benchmark Shanghai Composite was flat at 3,947.47 points.
Following the mainland’s lead, Hong Kong’s Hang Seng also remained unchanged, trading flat at 24,005.92.
Japanese shares traded lower with the Nikkei 225 index closing 0.4% lower at 20,519.45 points.
Investors are anticipating next week’s release of Japan’s economic growth for the past three months.
In Australia, the S&P/ASX 200 also fell by 0.5% finishing at 5,360.90 points as investors took a cue from Wall Street’s flat close and the ongoing uncertainty over the yuan.
China’s currency is important to Australia as it is the main export market for the country’s natural resources.
In South Korea, the Kospi index remained closed on August 14 as the country will mark a national holiday on August 15.
Chinese shares have recorded their biggest one-day fall for more than eight years following a sell-off towards the end of the trading day.
The Shanghai Composite closed down 8.5% at 3,725.56 after more weak economic data raised concerns about the health of world’s second largest economy.
Profit at China’s industrial companies dropped 0.3% in June from a year ago.
That followed data on July 24 indicating that factory activity in July seen its worse performance for 15 months.
The Shanghai market’s fall was the biggest one-day loss since February 2007.
Photo Getty Images
While there was little to explain why shares were being sold at such a level, analysts said fears that China might hold off from further measures to boost the economy had contributed to concerns among investors.
The stock market has been benefitting from a series of support measures from the government and regulators after it lost a third of its value in the three weeks from mid-June.
Since late June, Chinese authorities have cut interest rates, suspended initial public offerings, eased margin-lending and pushed brokerages to buy stocks, backed by money from the central bank.
Chinese shares had recovered about 15% of their value before today’s plunge – showing some signs of stabilization.
On July 27 stocks fell across the board, including benchmark index heavyweights such as China Unicom, Bank of Communications and PetroChina.
More than 1,500 shares listed in Shanghai and Shenzhen fell by their daily downward limit of 10%.
Elsewhere in Asia, Hong Kong’s Hang Seng index closed down 3.1% at 24,351.96 – its biggest loss in three weeks.
Japan’s benchmark Nikkei 225 index fell 1% to 20,350.10, while South Korea’s Kospi index finished 0.4% lower at 2,038.81.
Australian stocks bucked the downward trend, closing up 0.3% at 5,582.40.
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The Shanghai Composite, one of China’s leading stock indexes, has seen its highest daily spike in more than two years following signs that the government will step in to support battered equity markets.
