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