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China stock market bounces back | China stock market bounces back |
(about 9 hours later) | |
China's main share index rose by almost 8% on Monday after the government moved to revive investor confidence. | China's main share index rose by almost 8% on Monday after the government moved to revive investor confidence. |
The Shanghai Composite Index closed at 2,236.41, having jumped 9.5% on Friday. | The Shanghai Composite Index closed at 2,236.41, having jumped 9.5% on Friday. |
News that the financial regulator planned to make it easier for state-owned firms to buy back their own shares helped to fuel the rally. | News that the financial regulator planned to make it easier for state-owned firms to buy back their own shares helped to fuel the rally. |
Elsewhere in the world, shares were mixed as investors mulled a US plan to free banks of their bad debt aimed at solving the world financial crisis. | Elsewhere in the world, shares were mixed as investors mulled a US plan to free banks of their bad debt aimed at solving the world financial crisis. |
Government intervention | Government intervention |
Chinese banks were the biggest winners in the rebound, with Bank of China, Industrial & Commercial Bank of China and China Construction Bank all jumping by their daily 10% limit. | Chinese banks were the biggest winners in the rebound, with Bank of China, Industrial & Commercial Bank of China and China Construction Bank all jumping by their daily 10% limit. |
They gained from new rules that will allow state-run firms to buy back their own shares without first getting government approval. | They gained from new rules that will allow state-run firms to buy back their own shares without first getting government approval. |
It is the latest market-boosting move by Beijing, which last week scrapped a stamp duty on buying stock and said it would buy shares in three of the largest state-owned banks. | It is the latest market-boosting move by Beijing, which last week scrapped a stamp duty on buying stock and said it would buy shares in three of the largest state-owned banks. |
The intervention is aimed at shoring up confidence in domestic shares, which are down more than 50% from their peak earlier this year. | The intervention is aimed at shoring up confidence in domestic shares, which are down more than 50% from their peak earlier this year. |
But some analysts were not convinced at how sustainable the rebound will be. | But some analysts were not convinced at how sustainable the rebound will be. |
"Confidence is back, but the economy remains weak. Corporate profit growth at listed companies is slowing," said said Chen Ge, fund manager at Fullgoal Fund Management. | "Confidence is back, but the economy remains weak. Corporate profit growth at listed companies is slowing," said said Chen Ge, fund manager at Fullgoal Fund Management. |
Other Asian stock markets also gained on hopes that the ambitious US proposals to bail out troubled Wall Street banks will ease ructions in the banking system. | Other Asian stock markets also gained on hopes that the ambitious US proposals to bail out troubled Wall Street banks will ease ructions in the banking system. |
Japan's Nikkei rose 1.4% to end at 12,090.59 points , while Hong Kong's Hang Seng index rose 1.6% to 19,632.2 | Japan's Nikkei rose 1.4% to end at 12,090.59 points , while Hong Kong's Hang Seng index rose 1.6% to 19,632.2 |
In Europe, a calm start to trading gave way to losses after a buying frenzy on Friday. | |
The UK's FTSE 100 ended 75 points, or 1.4%, lower, at 5,236.3. In France, the Cac 40 closed 2.3% down, and the German Dax index fell 1.3%. |
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