The Shanghai Composite Index climbed 0.7% to 3,792 on Monday, while the Shenzhen Component advanced 1.8% to 13,960, rebounding from last week’s steep losses as authorities intensified efforts to restore investor confidence and stabilize China’s struggling equity market. China Reform Holdings and China Chengtong Holdings announced that they had increased their positions in Chinese equities and pledged further purchases to help steady the market.
At the same time, state media reported that the securities regulator would meet with market participants on Monday to discuss additional measures to support the stable development of the capital markets.
On the monetary policy front, the People’s Bank of China kept its key lending benchmarks at record lows for a 14th consecutive month in July, leaving the one-year loan prime rate unchanged at 3% and the five-year LPR at 3.5%. The decision came despite weaker-than-expected second-quarter GDP figures underscoring the fragility and unevenness of the economic recovery.
Banking stocks led the advance, with ICBC rising 2.4%, Agricultural Bank of China up 1.4%, and China Construction Bank gaining 3.7%.
