The Chinese government’s regulatory measures have helped Chinese shares rally, with the Shanghai Composite index trading up.
The Shanghai Composite index was up 4.54 per cent to 3,877.80 in early trading.
Hong Kong’s Hang Seng index has also seen a recovery, with the index up 1.92 per cent to 24,860.41.
Among the measures the government has taken to stimulate China’s stockmarket is to ban short selling and to only allow buying by state-owned pension funds and institutions.
The government has threatened to arrest people who speculate in the market and has injected money into the market through a form of quantitative easing.
Chris Weston, market analyst at IG Group, said the Shanghai Composite has seen its best two-day gain since 2008, “although the key difference between now and 2008 is that in 2008 a large percentage of the market wasn’t suspended”.
He added: “China has become quite a simple beast though, in that if you limit as many paths for market players to sell stock as you can - while subsequently using the Securities Finance Corp to support the market through a quasi-QE initiative - you should get a higher stock market. Mission accomplished!
“There has been of a lot of talk about whether we have seen the lows in the various Chinese markets and this could well be the case if the authorities can limit the sell orders in the market.”
