What goes down...: China Stocks Extend Rebound as State Funds Said to Buy Equities

[RandySF]

Chinese stocks gained in volatile trading after the government suspended a controversial circuit breaker system, the central bank set a higher yuan fix and state-controlled funds were said to buy equities.

The Shanghai Composite Index rose 3 percent at 1:34 p.m. local time, after falling as much as 2.2 percent earlier. Regulators removed the circuit breakers after plunges this week closed trading early on Monday and Thursday. The central bank set the currency’s reference rate little changed Friday after an eight-day stretch of weaker fixings that roiled global markets. State-controlled funds purchased Chinese stocks on Friday, focusing on financial shares and others with large weightings in benchmark indexes, according to people familiar with the matter.
“The scrapping of the circuit breaker system will help to stabilize the market, but a sense of panic will remain, particularly among retail investors," said Li Jingyuan, general manager at Shanghai Bingsheng Asset Management. "The ‘national team’ will probably continue to buy stocks significantly to stabilize the market."

While China’s high concentration of individual investors makes its stock-market notoriously volatile, the extreme swings this year have revived concern over the Communist Party’s ability to manage an economy set to grow at the weakest pace since 1990. The selloff has spread around the world this week, sending U.S. equities to their worst-ever start to a year and pushing copper to the lowest levels since 2009.


http://www.bloomberg.com/news/articles/2016-01-08/chinese-stocks-set-to-rally-after-circuit-breakers-scrapped

[Iliyah]

1. Bottom line, the world helped