17 de julio de 2015 / 5:03 / en 2 años

China stocks and futures rise, bears retreat on Beijing firepower

* CSI300 +1.56 pct, SSEC +1.37 pct

SHANGHAI, July 17 (Reuters) - China stocks rose on Friday as traders said the government resumed intervention in the market to scare off bears.

Investors are closely watching futures markets in particular, as the contract for the CSI300 index future matures by market close.

Market insiders told Reuters that contract, and the futures market in general, has become a battleground between regulators trying to push up the market, and bears trying to avoid taking a loss on short-positions.

The CSI300 index rose 1.6 percent, to 4,059.87 points by midday, while the Shanghai Composite Index gained 1.4 percent, to 3,875.50 points. Both look set to post modest weekly gains.

Beijing appeared to win the morning round, with the futures contract rising to meet the CSI300 index level, instead of the index falling to meet the futures price as on Wednesday, implying those that pushed futures down sharply earlier in the week are facing a loss barring a crash in the afternoon session.

However, some believe they simply rolled over their positions to next month.

“Many investors have already extended their future contracts to next month, so today’s futures settlement did not lead the index to fall,” said Zhang Qi, stock analyst at Haitong Securities in Shanghai.

“Also we suspected the ‘national team’ has continued buying shares today to prevent the market from falling.”

China CSI300 stock index futures for July rose 1.8 percent to 4,048.8 points by midday, 11.07 points below the current value of the underlying index, after a volatile morning.


The phrase “national team” is commonly used in China these days to refer to the consortium of government agencies, banks, brokerages and mutual funds that are committed to buy into the market until wider investor confidence is restored.

Investors and regulators appear increasingly worried about what the interventions are doing to market fundamentals.

While margin trading levels have come down sharply, and central bank liquidity has successfully stemmed a rout that saw main indexes lose around 30 percent of their value in just a few weeks, the question is how long the government will have to direct buying, and what the fallout will be on reforms.

Foreign capital has continued to flow out of Chinese stock assets, in particular A-shares, with the Shanghai-Hong Kong Stock Connect Pilot programme taking a particularly hard hit.

The northbound leg of the connect has seen net outflows for nine straight days. As a result, the Hong Kong and mainland markets have become increasingly out of sync.

The index measuring price differences between dual-listed companies in Shanghai and Hong Kong now indicates that H shares are selling at a 40 percent discount.

In Hong Kong, the Hang Seng index added 1.0 percent, to 25,421.16 points. The Hong Kong China Enterprises Index gained 1.1 percent, to 11,878.05.

Editing by Jacqueline Wong

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