China stocks rise sharply on signs of fresh government support

China stocks rise sharply on signs of fresh government support

© Jason Lee / Reuters

The CSI300 index <.csi300> of the largest listed companies in Shanghai and Shenzhen rose 4.3 percent, to 3,342.29 points, while the Shanghai Composite Index <.ssec> gained 4.9 percent to 3,232.35 points.

For the week, the SSEC lost 7.9 percent and the CSI300 fell 6.9 percent.

China's local pension funds will start investing 2 trillion yuan ($313.05 billion) as soon as possible in stocks and other assets, senior government officials said on Friday.

The central bank was also seen intervening for a second day to stabilize the yuan currency to reduce market expectations of further yuan depreciation, traders said.

China's surprise currency devaluation in mid-August and a survey showing deteriorating factory activity helped trigger a savage selling spree which at one point drove stocks down more than 20 percent within a week.

All main stock sectors rose on Friday.

Banking stocks <.csi300bi>, which surged on Thursday, underperformed the market after top lenders this week reported virtually no growth in profits in the first half of the year and a further increase in bad loans, adding to worries about the economy.

(Reporting by Samuel Shen and Pete Sweeney; Editing by Kim Coghill)