China's state-owned funds buy nearly $9 billion in shares to support market

China's state-backed funds have poured a record amount into a major technology exchange-traded fund (ETF) as part of an intensified effort to stabilize the country's sliding stock markets. The move marks a significant expansion of the government's market rescue operations, which have recently included large-scale purchases of shares by so-called 'national team' investors.

The buying spree has primarily affected the CSI 500 ETF, a fund tracking mid-cap and technology-focused stocks, which saw net inflows of approximately 8.9 billion U.S. dollars on a single day. This injection of capital is aimed at shoring up investor confidence and halting a prolonged market downturn that has erased billions in value from Chinese equities.

The intervention matters because it signals Beijing's growing concern over the stock market's decline, which threatens to undermine economic stability and household wealth. By targeting tech stocks, regulators are also seeking to support a sector that has been hit hard by regulatory crackdowns and slowing growth.

According to reports, the state-owned funds purchased nearly $9 billion in shares across various markets on a recent Monday, with the tech ETF seeing the largest single-day inflow on record. The China Securities Regulatory Commission (CSRC) has vowed to maintain market stability, with Chairman Wu Qing pledging a 'stable market' as the benchmark A-share indices rebounded following the concerted buying.

This rescue operation follows a series of earlier interventions, including buying by state-owned entities in previous months, as well as policy measures to boost liquidity and curb short selling. The market has been under pressure due to a combination of factors, including a property sector crisis, weak consumer demand, and geopolitical tensions.

Looking ahead, the CSRC is expected to continue its market support measures, with analysts suggesting that further buying may be necessary to sustain the rebound. The effectiveness of these interventions will be closely watched, as they test the government's ability to stabilize markets without resorting to more drastic measures.