Beijing has unveiled a string of measures to soothe sentiment following Monday's stock crash, reviving memories of last year's aggressive stabilization program but fueling doubts over China's commitment to market reforms.
On Tuesday, state-controlled funds, known as China's National Team, were reportedly buying equities while the People's Bank of China (PBOC) injected $20 billion into money markets—the largest operation since September. Authorities are also rumored to be directly intervening in currency markets to halt the renminbi's rapid depreciation.
And on Wednesday, officials announced arguably the most crucial measure yet.
A ban on major shareholders offloading stakes in listed firms due to expire on Friday—widely considered a major catalyst behind this week's selloff—will remain in place until new rules are promulgated, the Shanghai Securities News said at the market open. No further details, such as when the ban would be lifted, were given.
"Despite talk last year that the so-called National Team were not going to directly intervene in stocks, this idea seems to have reversed," said Chris Weston, IG's chief market strategist, in a morning note.