Thursday, 27 August 2015 10:23
SHANGHAI: Chinese stocks were up solidly by midday on Thursday, lifted by a rally in US shares overnight and Beijing’s move this week to cut interest rates to boost the world’s second largest economy, dealers said.
China’s benchmark Shanghai Composite Index gained 1.55 percent, or 45.28 points, to 2,972.57 after rising as much as 2.98 percent during the morning session.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, added 1.06 percent, or 18.02 points, to 1,713.78.
“The rise in the United States helped boost the market,” Zhang Yanbing, an analyst at Zheshang Securities, told AFP. “Market sentiment has improved, but a rebound will still take some time.”
Hong Kong shares also jumped, after hints the US Federal Reserve would not raise interest rates yet sparked a rally on Wall Street following days of turmoil over China.
The benchmark Hang Seng Index added 533.09 points to 21,613.48 by the end of morning trading.
Wall Street broke a six-day losing streak on Wednesday as the S&P 500 closed with a 3.90 percent gain, the Dow added 3.95 percent, and the Nasdaq Composite was up a heady 4.24 percent.
The gains came after an influential member of the US Federal Reserve’s monetary policy board said the impetus for a rate hike next month, as some had been predicting, had faded amid the turmoil gripping world markets.
His comments came after China on Tuesday reduced interest rates and cut the amount of money banks must hold in reserve — its second such double move in two months — to try to bolster its economy and end the country’s worst stock market rout in almost two decades.
Shanghai stocks closed down 1.27 percent in volatile trading on Wednesday, extending days of falls despite the rate cut.
Analysts say the latest rate cut — the fifth since November — is not enough to reverse slowing growth with more aggressive measures required.
Trading on Chinese stock markets has been highly volatile for weeks with Shanghai losing more than 40 percent of its value since a year-long, debt-fuelled rally collapsed in June, prompting the government to unleash unprecedented measures to support the market.
Its huge rescue package has included barring major shareholders from selling their stakes and funding the China Securities Finance Corp. to buy stocks on behalf of the government though analysts say the “national team” has appeared to scale back its intervention this week.
