China’s stock market has continued apace on its downward trajectory, with the Shanghai Composite falling by as much as 10% or more in October.
But a rally on Friday bucked the gloom for a day, following a full-court-press defense of the markets staged by top Chinese policymakers.
On the heels of a rough day of trading in New York, both the Shanghai and Shenzhen benchmarks gained about 2.6%, the best day for Chinese stocks in months.
The buying came on the heels of a big negative headline that China’s economic growth slowed in the third quarter to a point not seen since the great recession.
Chinese Vice-Premier Liu He stepped in front of the cameras on Friday, telling the country’s main state-run news organizations that the economy was on sound footing in terms of long-term prospects, despite the fluctuations in stock valuations.
“The consensus is that China is becoming the most valuable market for investment in terms of global asset allocation. The bubble has been greatly reduced. The quality of listed companies is improving, and their valuation is at a historic low level,” Liu said in an interview, as translated by China’s CGTN.
“I believe investors will hold rational views on these assessments. It can be said that the market correction is creating good investment opportunities for the long-term healthy development of the stock market,” he added.
The chairman of China’s top financial regulator, Guo Shuqing, also spoke to the media, saying that market fluctuations were seriously out of line with the fundamentals of China’s economic development and inconsistent with the stability of China’s financial system, according to Xinhua.
Authorities, he said, will work to bring the country’s financial markets back to “normal and healthy development.”