On Thursday, China stocks rebounded after the securities regulator introduced additional restrictions on short-selling to enhance market sentiment. Hong Kong stocks also experienced a significant increase.
The China Securities Regulatory Commission announced on Wednesday that securities re-lending, a practice where brokers borrow shares for clients to short sell, would be suspended. Additionally, margin requirements for short-sellers would be increased. These measures followed a disappointing June consumer inflation report, which had further weakened stock market performance.
By midday, the Shanghai Composite index had risen by 0.77%, reaching 2,961.99 points, while the blue-chip CSI 300 index climbed 0.98%. The CSI’s financial sector sub-index decreased by 0.75%, whereas consumer staples, real estate, and healthcare sectors saw gains ranging from 1.73% to 3.07%. Notably, new energy stocks surged by 3.8%, leading the gains.
In Hong Kong, Chinese H-shares rose by 1.44%, hitting 6,341.35 points, and the Hang Seng Index increased by 1.54%, reaching 17,740.44 points. The smaller Shenzhen index rose by 2.03%, the start-up board ChiNext Composite index increased by 1.98%, and Shanghai’s tech-focused STAR50 index climbed by 0.83%. The Hang Seng energy index edged up by 0.1%, while the IT sector rose by 1.6%.
Across the region, MSCI’s Asia ex-Japan stock index strengthened by 1.18%, while Japan’s Nikkei index saw a rise of 1.05%. The yuan was quoted at 7.2714 per US dollar, 0.06% stronger than the previous close of 7.276.
The recent regulatory measures in China have had an immediate positive impact on both mainland and Hong Kong stock markets, reversing some of the negative trends caused by economic concerns.
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