China stocks jump as government restores faith
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SHANGHAI (AFP) - Chinese stocks surged for a second day on Friday as a government rescue plan offered a respite from a month-long rout, but analysts warned of further uncertainty and volatility ahead.
The rally also provided some support to regional markets, which had earlier this week been hammered by fears about a spillover effect beyond China's borders.
By midday, the benchmark Shanghai Composite Index had surged 5.16 per cent, or 191.56 points, to 3,900.89.
The Shenzhen Composite Index, which tracks stocks on China's second exchange, jumped 4.00 per cent, or 78.26 points, to 2,033.61.
The Shanghai market rocketed 5.76 per cent on Thursday, after the government announced additional policies to avoid a market crash.
They came after the index plunged by almost a third in less than four weeks, wiping trillions from market capitalisations, spreading contagion in regional markets, and raising fears over the potential impact to the real economy.
The tide turned after the government banned big shareholders -- those holding at least five per cent stakes -- and company executives from selling stock for the next six months, and launched a police crackdown on short-selling.
