China: Stocks extend rise on signs of market stabilisation

[SHANGHAI] China stocks rebounded for the second day on Tuesday, in a further sign of improving investor sentiment that may help the market gradually stabilise after the rout since mid-June.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.9 per cent, to 3,339.03, while the Shanghai Composite Index gained 0.9 per cent, to 3,185.62 points.

China's volatility index, a gauge of investor fears, has dropped to 40 per cent from an August peak of 64 per cent.

But some analysts warn that the rebound could be temporary as valuations of small stocks are still high, and the Chinese economy has yet to find its feet.

Chinese President Xi Jinping told the Wall Street Journal in an interview that developing capital markets was a key goal of China's reforms, which will not change just because of current market volatility.

REUTERS