For the first time in four days, Chinese stocks went up on Friday after the central bank said it would help the market.
The CSI 300 index in China went up 3.6% to 3925.23, and it is now 22% higher than it was in late September, when the Chinese government first announced a plan to boost the economy.
The Hang Seng HSI 3.61% went up 3.6% as well. Several microchip names went up in Shanghai trade, and SMIC 98116.35% was one of the companies that did well.
Shares of Meituan (3,690, or 8.93%), Lenovo (992, or 6.24%), and BYD (1211, or 6.06%) all went up.
Before the market opened, JD.com stock (JD 2.91%) went up 5% and Alibaba stock (BABA 2.36%) went up 3%. The iShares MSCI China ETF MCHI 4.40% went up by 5%.
The People’s Bank of China on Friday kicked off two plans that will pump up to 800 billion yuan ($113 billion) into the stock market. Already 20 securities and fund companies have been approved to obtain liquidity from the central bank to buy stocks, the central bank said Friday.
Another 21 financial institutions are eligible for a facility to issue low-interest loans to eligible listed companies and major shareholders for stock repurchases and increases of holdings, which they can then refinance at a 1.75% annual interest rate with state institutions.
Chinese President Xi Jinping also delivered a speech highlighting the importance of science and technology companies.
The rally came on a day when the country reported its third-quarter gross domestic product slowed to a 4.6% rate in the third quarter from 4.7% in the second quarter.
Arjen van Dijkhuizen, senior economist for China at ABN Amro, said it was the weakest growth pace in six quarters as the property sector downturn continues to weigh on confidence and domestic demand. He expects the fourth-quarter growth rate to improve due to the recent stimulus.
The stock-market gains came as investors from the U.S. hit pause on investing in the country. According to Citi, there was outflows from China ETFs through the week ending Wednesday of $3.9 billion, following three weeks of inflows of $60.7 billion.
