Global Stock Market

Chinese Stocks Erase Plunge After State Funds Said to Intervene

Chinese state-backed funds were said to intervene on Tuesday to alleviate declines in the stock market, a sign that the rout had gone too far for policy makers. The equity benchmark erased a loss of as much as 3.2%.

The funds, known as China’s “national team,” stepped in to ensure stability during the government’s key policy meeting in Beijing, according to people familiar with the matter. A Hong Kong-based trader, who declined to be identified discussing client business, said entities linked to mainland funds were actively buying shares through stock links with Hong Kong on Tuesday.

The CSI 300 Index of stocks was little changed as of the midday break. Offshore investors purchased a net $514 million of Chinese shares via Hong Kong in the morning session, according to data compiled by Bloomberg. Private funds also re-entered the market, encouraged by evidence Beijing is putting a floor on losses. Some of the biggest gainers were stocks that had led the rout, such as Kweichow Moutai Co. and China Tourism Group Duty Free Corp.

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