Not long after Tuesday's market close, the Shanghai Securities Association, the Shanghai Futures Association, and the Shanghai Asset Management Association jointly released a notice that called on market participants to steadfastly maintain market stability. The benchmark finished below 2,900 points on Tuesday after failing to hold above the key support level of 3,000 points. The Shanghai Composite Index plunged 5.13 percent on Monday before shedding another 1.44 percent on Tuesday. "We've taken note of some fluctuations in the financial market recently, mainly affected by investors' expectations and sentiment," read the note.
Shortly prior to the market opening on Tuesday, the People's Bank of China (PBC), the central bank, posted a short statement on its website, reassuring the market of the economy's sound fundamentals, the huge potential of the economy's organic growth. In a major sign of policy support, Chinese President Xi Jinping on Tuesday chaired the meeting, stressing efforts to strengthen China's infrastructure development and build infrastructure facilities that are conducive to China's industrial development and national security. The country still has leeway to restore investor confidence, they noted, expecting more moves in the pipeline to steady the yuan, which alongside the progress on virus containment in some of the nation's largest cities would be key to driving a market turnaround.Ī meeting of the Central Committee for Financial and Economic Affairs on Tuesday called for market expectations to be well guided and policy orientations and principles to be clarified, so as to stabilize market confidence. The announcements spanning investment, consumption, and monetary policies are supposed to create a buffer against downward pressures on the economy, market observers said. As China's equity and foreign exchange markets undergo big swings amid multifaceted uncertainties, a flood of official remarks, policy recommendations and actions have been made or taken, as part of the government's bid to instill optimism for the world's second-largest economy and the capital market.
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