China stock-index futures rose amid speculation the government has resumed its intervention in the equities market.
CSI 300 futures for
September jumped 4 percent at 9:15 a.m. local time, before the release
of industrial companies’ profits. The central bank raised the yuan
reference rate by 0.15 percent to 6.3986 per dollar on Friday morning,
the most since March.
The Shanghai Composite
Index rallied 5.3 percent to 3,083.59 on Thursday, with all of the
gains coming in the last 45 minutes of trading amid speculation state
funds have resumed buying. The benchmark gauge has lost 12 percent this
week.
Policy makers want to
stabilize equities before a Sept. 3 military parade celebrating the 70th
anniversary of the World War II victory over Japan, said two of the
people, who asked not to be identified because the move wasn’t publicly
announced. The shift followed the absence of state buying earlier this
week.
The intervention to
prop up shares is part of a broader effort to ensure nothing detracts
from the parade, an event the government will use to demonstrate its
rising military and political might. The parade has been planned for
months and will provide President Xi Jinping his first opportunity to
publicly present himself to the world as China’s commander in chief.
The Shanghai Composite
has fallen 40 percent since the June peak amid concern the government
has scaled back efforts to prop up equities and the economic slowdown
was deepening.
China Securities
Finance may have applied for 1.4 trillion yuan ($219 billion) of
borrowing in the interbank market, Caixin reported, citing unidentified
bank officials. The government should adopt a proactive fiscal policy
and further ease monetary policy, the Economic Daily wrote in a
front-page commentary.
Source : Bloomberg
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