SHANGHAI: China stocks advanced on Wednesday, led by the blue-chip CSI300 index closing at a six-month high, as a growing number of listed firms encouraged employees to buy shares, and as the central bank moved to ease fears of a mid-year liquidity crunch. The blue-chip CSI300 index rose 1.2 percent, to 3,533.87 points, while the Shanghai Composite Index also advanced 1.2 percent to 3,140.32 points. Hopes that MSCI will include China’s A shares in its indexes later this month also whetted investors’ appetite for big-cap stocks, with more investment banks predicting a good chance of such a move. Over the past week, controlling shareholders of over a dozen listed companies have called on employees to buy the companies’ shares, while promising to absorb any losses incurred if they hold the shares for at least 12 months. Shares in those companies have jumped in response, and the optimism appears to be spreading as investors bet more companies would issue similar statements.
Markets watchers said it was not clear if the calls to buy shares were linked to broader efforts by authorities to stabilise money and currency markets in recent weeks. But investors drew some solace from signs that the central bank is moving to ease worries of liquidity stress later this month as banks brace the central bank’s quarterly health check. On Wednesday, the People’s Bank of China injected 180 billion yuan ($26.49 billion) into the interbank market via open market operations, after providing capital support via one-year Medium-term Lending Facility (MLF) loans in the previous session.
