Chinese stock markets surged on Thursday after state regulators enacted further drastic measures to offset an economic crisis.
When the markets closed at 3 p.m. local time, the Shanghai Composite Index sat at 3,709.33 points, up from 3,432 at market open. The lion’s share of the 5.76% jump came in the afternoon, following the announcement that the state would ban major shareholders — those with shares of more than 5% — from selling their stocks for the next six months.
State media was quick to celebrate the day’s gains. Xinhua News Agency tweeted that the jump was “long awaited” following “repeated supportive measures,” likely referring to Beijing’s recent efforts to stymie the massive sell-off in the markets of Shanghai and Shenzhen.
The recent volatility, however, suggests that Thursday’s triumphs could be temporary — one oscillation in a rapidly fluctuating system.
“Short and powerful rallies during bear markets are normal,” Tom Elliott, an international investment analyst at the financial consultancy deVere Group, tells TIME. “It was possibly triggered by government-encouraged buying by state controlled companies, but in the absence of dramatic and substantial intervention by the authorities I wouldn’t read too much into it.”
Elliott says that state interventions might eventually stabilize the market, but in the meantime, the current situation “absolutely” qualifies as a crisis. In spite of Thursday’s jumps, confidence in the market appears to remain sparse. The South China Morning Post reports that 128 additional companies suspended the trading of their shares in China’s two stock markets, bringing the total number of suspended companies to 1,400 — half of all companies listed on these markets.
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