China's GDP disappoints, but stocks surge anyway as officials pledge to support markets
- By market close, the Shanghai composite and Shenzhen composite had surged 2.58 percent, while the Nasdaq-style Chinext index went up 3.18 percent. Hong Kong's Hang Seng index rose 0.51 percent as at 3.21 p.m. HK/SIN.
- That occurred after a sell-off in the mainland Chinese markets on Thursday, with the Shanghai seeing its lowest point since November 2014, and a turbulent morning after weaker-than-expected GDP data was announced
Greater China markets made a strong comeback on Friday afternoon, following a series of measures announced by Chinese leaders to support the struggling stock market.
After a turbulent morning following weaker-than-expected GDP data and a sharp sell-off the day before, shares in the mainland rebounded, rising more than 2 percent.
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By market close, the Shanghai composite and the Shenzhen composite had surged 2.58 percent, while the Nasdaq-style Chinext index went up 3.18 percent. Hong Kong's Hang Seng index rose 0.51 percent as at 3.21 p.m. HK/SIN.
Thursday had seen a sell-off in the mainland Chinese markets, with the Shanghai index seeing its lowest point since November 2014.
Investors had also been jittery after China's GDP numbers were released, showing that economic growth slowed to 6.5 percent year-over-year in the third quarter. That missed expectations for 6.6 percent growth, according to analysts polled by Reuters. Friday's print was the weakest pace since the first quarter of 2009.
But on Friday morning, the heads of the People's Bank of China, the Securities Regulatory Commission and the Banking and Insurance Regulatory Commission all issued statements expressing support for the stock market and positive economic fundamentals.
China's securities regulator unveiled a series of measures to aid the country's struggling stock market, which had been on a downward trajectory all year. It said it would encourage funds to help ease liquidity difficulties at listed companies, and would support share buy-backs.
However, Hao Hong, head of research and chief strategist at Bank of Communications (International), said China was already poised for an "oversold rebound" — even without the supportive comments from the regulators.
"The market is oversold anyway, the market is so oversold it's not funny," he told CNBC on the phone.
"If you want to make a speech to support the stock market now may be the right time," Hong said, noting that would give "more bang for your buck."
The Commonwealth Bank of Australia, meanwhile, said in an afternoon note that the GDP data released on Friday is "likely to encourage the Chinese authorities to keep macro-economic policy settings supportive."
"We expect monetary policy to remain 'prudent' and fiscal policy to remain 'more proactive'," the note said.
— CNBC's Huileng Tan, Yen Nee Lee, Evelyn Cheng and Reuters contributed to the story.