Stock market today: Chinese shares lead gains in Asia on report of market rescue plan

BANGKOK (AP) — Shares were mostly higher in Asia on Tuesday, led by sharp gains in Hong Kong and Shanghai after a report said Beijing plans to put about 2 trillion yuan ($278 billion) into support to stabilize ailing Chinese markets.

The unconfirmed report by Bloomberg cited unnamed sources. It said China plans to tap offshore funds held by Chinese state-owned enterprises and also local funds.

Hong Kong’s Hang Seng jumped 3.2% to 15,434.69 and the Shanghai Composite index was up 0.7%, at 2,776.06.

Shanghai had retreated on selling by investors disappointed by China’s decision to keep the loan prime rate unchanged despite concern over the outlook for the economy, which is forecast to slow further after a post-pandemic recovery faded more quickly than expected.

Shanghai’s benchmark fell 2.7% on Monday. It has been trading at its lowest levels since 2019. The Hang Seng was down about 12% so far this year as of Monday’s close.

Even if a substantial rescue plan helps staunch losses, it might not be a panacea if it falls short of building the confidence needed to sustain market stability, Tan Boon Heng of Mizuho Bank said in a commentary.

“China’s sustained sell-off is taking place despite the rally in global equities. And rather than a delayed convergence in relative shifts, with the re-opening in China, the divergence has only worsened over time,” Tan said.

Tokyo’s Nikkei 225 index gave up earlier gains to edge 0.1% lower, closing at 36,517.57. It has been nudging closer to its all-time record of 38957.44 set in December 1989, before the implosion of a financial bubble that ushered in an era of slowing growth.

The Bank of Japan cited “extremely high uncertainties surrounding economies and financial markets at home and