BEIJING: China stocks rose on Friday after reports that trillions of yuan funds will likely re-enter the equity market from a Chinese government agency and a bunch of China funds.
The CSI300 index rose 1.8 percent to 3,901.92 at the end of the morning session, while the Shanghai Composite Index gained 1.9 percent to 3,731.03.
China CSI300 stock index futures for August rose 3.6 percent to 3,892, or 9.92 points below the current value of the underlying index.
The Chinese government agency tasked with buying stocks to prop up the country’s wobbling markets is seeking an additional 2 trillion yuan ($322 billion) in funds, Bloomberg reported on Thursday.
Meanwhile, close to 300 China funds that oversee more than 1 trillion yuan are sitting on the sidelines with “ammunition” to enter the stock markets at any time, the Shanghai Securities News reported on Friday, citing its own calculations.
“My feeling is that funds in the stock market are quite sufficient now and there’s very high possibility the market will rebound in August,” said Zhang Qi, an analyst at Haitong Securities in Shanghai.
The A shares have seen its value wiped out by more than 30 percent since mid-June despite a slew of supportive measures from the Chinese government.
Goldman Sachs analysts estimate that the “national team” has potentially spent 860-900 billion yuan to support the stock market in June-July and the potential aggregate size of market-support funds is probably around 2 trillion yuan.
