China stocks rise 0.5% after reports of capital-market support talks

China stocks rose in early trade on Monday, with the CSI300 Index gaining around 0.5%, after reports that regulators had scheduled talks on capital-market support. Reuters reported that the talks on capital-market support for China stocks involved discussions with brokerages and fund managers, not an announced support package. Concerns linked to Zhuhai Huafa Group continued to affect related shares and bond funds.

China stocks gain around 0.5% in early trade

Reuters reported that the CSI300 had fallen 8.5% in October. That was the index’s worst monthly performance in more than a decade.

A 30-year government bond fund falls 0.3%

Reuters reported that a listed fund investing in 30-year Chinese government bonds fell 0.3% in early trade on Monday, after declining nearly 1% in the previous session. Hedge fund manager iFund Asset Management said liquidity pressure linked to Huafa had spread to bond funds and pushed some funds to trade at discounts.

Regulators schedule talks on relending facilities

The 21st Century Business Herald reported that China’s central bank and securities regulator were scheduled to meet brokerages and fund managers on Monday to discuss policy tools for supporting capital markets.

Shanghai Securities News reported that the People’s Bank of China, the National Financial Regulatory Administration, the China Securities Regulatory Commission and major banks would discuss ways to optimise relending facilities for share buybacks and purchases.

Shares of Huafa Properties, Advanced Fibre and Weiyue Group extended their declines in early trade on Monday, Reuters reported.

Zhuhai Huafa reported two missed trust repayments

Reuters reported that developments in the previous week included Zhuhai Huafa Group’s failure to repay two maturing trust products and requests for extensions on some bank loans.

UBS economist Yu Song said the likelihood of a broad-based stimulus package similar to the one announced in September 2024 remained low. Reuters said his assessment meant investors might have to temper expectations of aggressive policy support.