SHANGHAI May 16 China stocks reversed earlier
losses to end higher for the fourth straight day on Tuesday, as
investors were relieved by central bank efforts to boost
liquidity in the financial system even as regulators announced
fresh curbs on shadow banking.
The blue-chip CSI300 index rose 0.9 percent, to
3,428.65 points, while the Shanghai Composite Index
gained 0.7 percent to 3,112.96 points, both posting their best
day in five weeks.
Late on Monday, China's banking regulator tightened
disclosure rules on lenders' wealth management products (WMPs)
in its latest move to curb shadow banking and risky investments.
Separately, the China Banking Regulatory Commission (CBRC)
unveiled plans to publish a flurry of regulations later this
year to control financial risks.
On the trading floor, however, concerns over tighter
regulations that have knocked the market recently were partly
offset by signs the government is moving to keep the economy
On Tuesday, China's central bank injected a net 170 billion
yuan ($24.67 billion) into money market through open market
operations - the most in nearly four months - to offset
liquidity stress caused by corporate tax payment and maturing
In a rare explanation, the central bank said the injection
is meant to "offset impact from factors including tax payment
and maturing open market operations", indicating Beijing's
intention to maintain stability in the markets amid widespread
concerns over policy tightening.
Analysts say the market is likely to stabilize after staying
in the red for five consecutive weeks as regulators try not to
go too hard in their quest to curb debt risks.
"The market is increasingly likely to stabilize," Li Chao,
analyst at Huatai Securities wrote.
"If the market misunderstands policy intentions and
continues to fall, there will be more soothing remarks from
Most sectors gained ground, led by consumer and
material stocks, while banks shares
dragged the most.
Small-caps outperformed the broader market, with the index
tracking small and medium sized companies in Shenzhen
advancing 2 percent, posting its best day in 9 months.
(Reporting by Luoyan Liu and John Ruwitch; Editing by Shri