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China: Stocks regain some ground at the end of a dismal week
[SHANGHAI] China stocks swung wildly early Friday before staying in positive territory and ending the day up 2 percent, after regulators suspended a newly-minted circuit breaker mechanism in a bid to calm panicky investors.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 2.0 per cent, to 3,361.56, while the Shanghai Composite Index gained 2.0 per cent, to 3,186.41 points.
During the first week of 2016, China stocks lost roughly 10 per cent, their worst weekly performance since the market crashed in the summer.
On Thursday night, China's securities regulator announced a suspension of circuit breakers after just four days operating the mechanism, saying it had not worked as anticipated and was doing more bad than good.
Analysts said the move injected life into the market. "The market is back to normal. Investors can buy and sell as they wish," said Tian Weidong, analyst at Kaiyuan Securities. "Under the circuit breaker mechanism, the market was suffocated." China stocks rose across the board on Friday, with the resources sector surging more than 6 percent and energy shares jumping over 5 per cent.
Analysts attributed the rise in those sectors to Beijing's efforts to reduce excess capacity, which investors believe will lead to industry consolidation and benefit major listed players.