Shanghai shares rebound after PBOC injected funds into market

Hu Yumo
Investors also cheered by PBOC governor's words that China has strong fundamentals and can cope with external shocks. 
Hu Yumo

Shanghai stocks rebounded on Wednesday from the previous day's heavy losses after China’s central bank calmed the market and injected funds into the financial system.

The Shanghai Composite Index ended 0.27 percent higher at 2,915.73 points, with iron and steel producers leading the gains.

Following the over 3 percent tumble of the key stock index to below the 3,000-point threshold, People’s Bank of China Governor Yi Gang reiterated late on Tuesday that the country boasts good economic fundamentals and investors should keep calm and rational.

“I am fully confident on the health of China’s capital market based on good economic fundamentals. China’s economy has the capability to cope with external shocks,” said Yi.

Yi also noted that the PBOC is prepared for potential external shocks, will use various monetary policy tools, ensure liquidity to promote stable economic development as well as fend off systemic financial risks.

Investors were also cheered by the central bank's injection of 100 billion yuan (US$15.5 billion) into the financial market through reverse repurchase agreements today, according to a statement published on the PBOC's official website.

Iron and steel producers, liquor makers and pharmaceutical companies were among the biggest gainers. Xinjiang Ba yi Iron & Steel Co Ltd surged by the daily limit of 10 percent to 5.15 yuan, Zhejiang Hisun Pharmaceutical Co Ltd rose 4.79 percent to 15.10 yuan and Shanxi Xinghuacun Fen Wine Factory Co Ltd added 4.65 percent to 62.51 yuan.

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