BEIJING: Stocks in China logged their biggest one-day gain in a month on expectations Beijing will maintain its market support.
The Shanghai Composite Index SHCOMP, +4.92% closed 4.9% higher at 3,928.42 and the smaller Shenzhen Composite 399106, +4.49% rose 4.5% to 2,274.84.
The gains come after regulators have cracked down on short selling, and added to their buying streak over the past month to prop up shares. On Friday, China’s securities regulator said it has called on the nation’s securities brokers and fund managers to help stabilize the stock market, which is roughly a quarter off its mid-June peak.
Still analysts believe the main benchmark faces pressure at the 4,000 level, with investors eager to take profits on quick rises.
“The regulator has too much space to change and interpret rules, which makes this an abnormal market,” said Zhang Xin, an analyst at Guotai Junan Securities.
In meetings with officials from the securities industry, a senior official with the China Securities Regulatory Commission also called for stepped-up supervision over margin trading in an effort to limit market risk, the regulator said. Margin trading, which allows investors to buy shares with borrowed funds, has been a factor in China’s huge stock-market run-up and subsequent dramatic drop.
