China Stocks Regain Ground to End a Dismal Week

(Reuters) —
An investor takes notes of stock information in front of an electronic board at a brokerage house in Beijing, China, January 8, 2016. REUTERS/Jason Lee TPX IMAGES OF THE DAY
An investor takes notes on stock information in front of an electronic board at a brokerage house in Beijing, China, Friday. (Reuters/Jason Lee)

China stocks swung wildly early Friday before staying in positive territory and ending the day up 2 percent, after regulators suspended a newly minted circuit breaker mechanism in a bid to calm panicky investors.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 2.0 percent, to 3,361.56, while the Shanghai Composite Index gained 2.0 percent, to 3,186.41 points.

During the first week of 2016, China stocks lost roughly 10 percent, their worst weekly performance since the market crashed in the summer.

On Thursday night, China’s securities regulator announced a suspension of circuit breakers after just four days operating the mechanism, saying it had not worked as anticipated and was doing more bad than good.

Analysts said the move injected life into the market.

“The market is back to normal. Investors can buy and sell as they wish,” said Tian Weidong, analyst at Kaiyuan Securities.

“Under the circuit breaker mechanism, the market was suffocated.”

China stocks rose across the board on Friday, with the resources sector surging more than 6 percent and energy shares jumping over 5 percent.

Analysts attributed the rise in those sectors to Beijing’s efforts to reduce excess capacity, which investors believe will lead to industry consolidation and benefit major listed players.

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