October 12, 2018 / 2:41 AM / a month ago

China state media calls for policy support after stock market sell-off

SHANGHAI, Oct 12 (Reuters) - Chinese state media sought to soothe jittery investors on Friday after the previous session’s plunge in China stock markets, saying the sell-off is “irrational” while calling for more market-friendly policies.

Meanwhile, a slew of China-listed companies announced late on Thursday their major shareholders would increase holdings, or the firms would buy back shares.

The official Securities Times said in a front-page editorial that a correction in U.S. stocks is natural, so “worrying about a brewing global storm and continuing to be pessimistic on China A-shares is blind, and totally unnecessary.”

Authorities “should roll out positive measures so that investors know the government cares about the stock market, while listed companies and financial institutions should also contribute to improving market confidence,” the media said.

China’s benchmark Shanghai Composite index fell roughly 1 percent in early trading on Friday. The gauge fell as much as 6 percent to near four-year lows on Thursday amid a global market rout.

In a front-page editorial on Friday, Securities Daily, another state-backed newspaper, urged the government to “inject liquidity” into the stock markets to help stabilize share prices.

“We should take measures to minimize the negative impact of (falling) U.S. stocks,” the article said.

State-owned Global Times said in an editorial that China’s stock market “has a limited impact on the whole Chinese economy, and the Chinese economy has withstood this round of impacts.”

“What will happen to the US stock market and how it affects the US economy remain to be seen,” the Global Times editorial said.

Meanwhile, the Asset Management Association of China (AMAC) published a statement late on Thursday arguing that “the best time to invest is when the market is in worst situation”.

A slew of listed companies, including China Shipbuilding Industry Co and PCI-Suntek Technology Co said late on Thursday major shareholders plan to increase their holdings.

Separately, at least six companies unveiled plans on Thursday for share buybacks. (Reporting by Samuel Shen and Andrew Galbraith; Editing by Richard Borsuk)

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