Chinese ADRs and ETFs jumped in premarket trading. Bilibili, XPeng up over 4%; Alibaba, CWEB, Kingsoft Cloud up around 3%; Hesai Group, Pony AI up over 2%.
Chinese stocks advanced on expectations of renewed liquidity support after reports that regulators met with banks and brokerages to discuss market measures.
The CSI 300 Index rose 0.8%, rebounding from last week’s 2.9% drop. The tech-heavy Star 50 Index ended the day more than 3% higher. The onshore yuan climbed 0.2% against the dollar.
Expectations that authorities will step in have been brewing in recent weeks as stocks extended their downward spiral, with the CSI 300 Index tumbling into a bear market. Chinese media Cailian reported that the central bank will PBOC to Conduct New Round Equity Swap Facility Tue.: Cailian (1) its swap operation on Tuesday, utilizing a key tool from the 2024 rescue plan to inject liquidity. The news outlet also reported earlier that financial regulators planned to meet with major banks on Monday to study optimizing lending programs, which were also used in 2024.
“Today’s move provides crucial incremental liquidity at a time when the market lacks fresh capital to absorb selling pressure, helping it stabilize and find a bottom,” said Yuan Weitao, fund manager at Xi’an-based asset management firm Guofulianhe. “Rather than stepping in with large-scale funding after every sharp decline, the authorities and regulators are taking a more measured approach and allowing the market to adjust on its own.”
Chinese shares have been mired in a slump since the summer, weighed down by a weak economy and doubts over AI earnings. Previous attempts to revive the market — including a round of buying by the national team starting July, and regulatory guidance to curb selling last month — have fallen short.
Comments