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2nd Ld-Writethru: China stocks rebound Friday

Xinhua, August 28, 2015 Adjust font size:

Chinese stocks recovered more than 10 percent in two days after a five-day losing streak that wiped out a fifth of the market value.

The benchmark Shanghai Composite Index climbed 4.82 percent to close at 3,232.35 points on Friday, following a 5.34-percent rebound the previous day. The Shenzhen Component Index added 5.32 percent to close at 10,800 points.

The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, gained 6.26 percent to close at 2,082.12.

A total of 581 shares rose by the daily limit of 10 percent. Companies in the military industry were among the biggest winners, with the sector surging over 9 percent days before the big military parade scheduled in Beijing.

The rebound came after the sharpest stock market decline in eight years on Monday, followed by another 7.63-percent dive the next day.

You Jun, vice minister of the Ministry of Human Resources and Social Security, said during a press conference on Friday that about 2 trillion yuan (313 billion U.S. dollars) of the nation's pension fund is available to be invested in new products, including the domestic stock market.

The State Council officially green-lit the fund to invest in the stock market on Sunday, amid the rout that had affected global stocks.

However, propping up share prices will not be the fund's core purpose, said You; it will focus more broadly on any safe investments that ensure long-term and stable yields.

The entry of the pension fund into the stock market will increase the percentage of institutional investors in the market and reduce fluctuations, though the effect will barely be seen in the short term, said Minsheng Securities.

Friday's gain came despite an accelerated fall in industrial profits, which retreated 2.9 percent year on year in July, sharply down from the 0.3-percent decline posted in June, the National Bureau of Statistics said on Friday.

In a move to bolster growth of the real economy amid fluctuations in global financial markets, the People's Bank of China on Tuesday cut interest rates for one-year lending and deposits by 25 basis points, and announced a reduction of the reserve requirement ratio, the portion of money banks need to set aside as reserves. Endi