Chinese stocks jumped today after Beijing unleashed an unprecedented series of support measures over the weekend to stave off the prospect of a full-blown crash that was threatening to destabilise the world's second-biggest economy.
In an extraordinary weekend of policy moves, brokerages and fund managers vowed to buy massive amounts of stocks, helped by China's state-backed margin finance company.
They in turn would be aided by a direct line of liquidity from the central bank.
Investors, who had ignored official measures to prop up the market as equity indexes slid around 12% last week, finally reacted.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen jumped 4%, while the Shanghai Composite Index gained 3%.
The rapid decline of China's previously booming stock market, which by the end of last week had fallen around 30% from a mid-June peak, had become a major headache for President Xi Jinping and China's top leaders, who were already struggling to avert a sharper economic slowdown.
In response, China has orchestrated a halt to new share issues, with dozens of firms scrapping their IPO plans in separate but similarly worded statements over the weekend, in a tactic authorities have used before to support markets.
China Vanke, the country's largest developer, said in a statement to the Hong Kong Stock Exchange it planned to repurchase up to 10 billion yuan ($1.6 billion) worth of its domestic shares to protect investor interests.
China's state media rolled in behind the official moves with supportive reports and commentaries.
China stocks had more than doubled over the past year, despite a cooling economy and weakening corporate earnings, resulting in a market that even China's bullish securities regulators eventually admitted had become too frothy.
But the slide that began in mid-June, and which the China Securities Regulatory Commission initially tried to downplay as a "healthy" correction, quickly showed signs of getting out of hand.
A surprise interest-rate cut by the central bank at the end of June, relaxations in margin trading and other "stability measures" did little to calm investors, many of whom have borrowed heavily to play the stock market.
In a series of initial announcements on Saturday, China'stop brokerages pledged to collectively buy at least 120 billion yuan ($19.3 billion) of shares to help steady the market, and would not sell holdings as long as the Shanghai Composite Index remained below 4,500, a level last seen on June 25.
The China Mutual Fund Association said 25 fund companies also pledged on Saturday to buy shares.
Another 69 fund firms said on Sunday they would do the same.
In addition, 28 companies that had been approved to launch IPOs all announced they had suspended their plans.
The move is consistent with past IPO freezes in China when share markets were falling sharply, though they are usually spun as spontaneous company decisions, not as government directives.
