Sure looks like the financial powers in China’s government have one again decided to defend the 3,000 level on the Shanghai Composite Index. The index is down 13% since January 24 and came within 1.4% of the 3,000 level on Wednesday before rallying.
That has set off speculation that state-run funds had stepped in to support stock prices at that level.
What’s the evidence? These same players stepped in at the same level last year to support the Shanghai market. And the stocks that rallied the most on Wednesday were the large-cap banks and oil companies that are typical favorite of these state-run funds.
The Shanghai Composite closed up 3091 for the day, a gain of 0.80%, after being down as much s 0.80% on the day.
Hong Kong’s Hang Seng index also gained 0.74% Wednesday.
At3:30 p.m. New York time the Standard & Poor’s 500 was up 0.32% and the Dow Jones Industrial Average was off 0.05%.
Oil had a huge day as U.S. benchmark West Texas Intermediate climbed 3.16% and international benchmark Brent crude gained 2.24%.
The 10-year U.S. Treasury dropped in price to bring the yield to 2.87%, four basis points higher on the day. Gold gained 0.14% to $1351.40 an ounce.