Hong Kong, Feb 6 (IANS): Chinese stocks staged their biggest rally in years on Tuesday, after the country’s sovereign wealth fund said it would step up buying shares as officials scramble to draw a line under a three-year market rout, a media report said.
The Shanghai Composite, mainland China’s benchmark index for large state-owned companies and blue-chip stocks, ended up 3.2 per cent on Tuesday, ending a six-day losing streak. It marks the biggest daily increase since March 2022, CNN reported.
Smaller companies did even better, as the Shenzhen Component Index rose 6.2 per cent. It was the index’s best daily gain since September 2015, while startup index ChiNext had its best performance in seven years, soaring 6.7 per cent.
In Hong Kong, the Hang Seng Index surged 4 per cent, the biggest percentage gain in more than six months. Chinese tech shares led the way with Alibaba Group, which is due to announce earnings on Wednesday, up 7.6 per cent, CNN reported.
The rebound came after Chinese authorities stepped up their efforts to rescue the ailing stock market, which had a dire 2023 and has been the worst performer in the world so far this year.
By Monday, about $6.1 trillion in market value had been wiped from the Chinese and Hong Kong stock markets since their recent peaks in February 2021, CNN reported.
Central Huijin Investment, the equity arm of state-owned China Investment Corp, announced on Tuesday that it had recently expanded its holdings of exchange-traded funds (ETFs) on mainland stock markets.
“We will continue to increase our holdings and expand our holdings to resolutely maintain the stable operations of the capital market,” it said in a statement.
Shortly after the announcement, the China Securities Regulatory Commission (CSRC) issued a statement saying it “firmly supports” Central Huijin Investment in its plan to continue to increase the scale of its holdings.
The regulator said it would also encourage more institutional investors, such as mutual funds, state pension funds and insurers, to enter the stock market, the CSRC added.
The intensified efforts came after Chinese markets resumed their slide on Monday, when more than 1,800 stocks fell by over 10 per cent in Shanghai and Shenzhen, CNN reported.