Mainland Chinese shares climbed for a second straight session on Wednesday, despite growing concerns over the escalation of trade tensions. The Shanghai Composite index gained 1.31%, closing at 3,187, while the Shenzhen Component rose 1.22% to 9,540.
China stocks rise on State-backed support
These gains came even as the U.S. implemented aggressive new tariffs, including a cumulative 104% levy on Chinese imports, which raised fears of a protracted trade war. However, Chinese authorities moved quickly to stabilize the markets, signaling their determination to mitigate the negative effects of these external pressures.
Beijing ramped up its efforts to support market stability by encouraging state-owned financial institutions to boost their equity investments, helping to provide liquidity and restore investor confidence. Several listed companies also announced share buybacks, a move aimed at supporting their stock prices and demonstrating confidence in their business prospects despite the external economic challenges. These efforts seem to have helped cushion the impact of the new tariffs, providing a buffer against the downward pressure in the market.
Premier Li Qiang further bolstered investor sentiment
Premier Li Qiang further bolstered investor sentiment by reinforcing confidence in China’s economic resilience, stating that the government has a full range of tools at its disposal to "fully offset" external shocks. His comments highlighted China’s ability to navigate through turbulent global conditions and underscored the country’s commitment to maintaining stability, even as it faces mounting trade-related challenges. Meanwhile, China’s leadership reiterated its stance of retaliating against the U.S. tariffs, with officials vowing to "fight to the end" to defend national interests and protect domestic industries from the detrimental effects of the ongoing trade dispute.
Who's outperformed
Despite the broader trade uncertainties, the stock market saw a number of strong performers. East Money surged by 4.1%, while Yonghui Superstores rose 6%, and Cambricon Technologies posted an impressive 8.8% gain. These companies stood out as some of the top performers, benefiting from the efforts to stabilize the market and the broader optimism surrounding China’s economic resilience. While the external environment remains challenging, China's efforts to bolster market confidence appear to have played a significant role in supporting the domestic equity market in the face of global volatility.
