Stocks rebound for third day, 360 companies resume trading

Investors smile at a securities brokerage in Fuyang city, Anhui province, June 1, 2015. [Photo/IC]

Chinese shares continued broad rally on Monday for the third consecutive trading day, following intensive moves by the government to stabilize the market.

The benchmark Shanghai Composite Index rose 2.39 percent to close at 3,970.39 points in the day. The smaller Shenzhen Component Index surged 4.78 percent to close at 12,614.16 points.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, climbed 5.8 percent to end at 2,683.07 points.

A record number of more than 360 companies resumed trading on Monday, as stocks rose for a third day amid policy supports.

The companies withdrew their trading suspension after the Shanghai gauge jumped a combined of 10.6 percent in the past two days. Another 1,045, or 40 percent of the country's listed firms, were still under halt as of Monday opening.

Announcements of stock price stabilization plan came amid resumption of trading by some firms. Companies including Tianjin Benefo Tejing Electric Co and Shanxi Coal International Energy Group said their major shareholder will overweight their holdings with 60 million and no less than 13 million yuan respectively.

Major shareholders, directors, supervisors and senior managers are encouraged to maintain stable stock prices by buying more shares when prices fall sharply, the China Securities Regulatory Commission said in a statement on Wednesday.

Directors and senior management will no longer be subject to a window period if they are to increase holdings in their own listed companies, should the shares drop by more than 30 percent within 10 consecutive trading days, according to the statement.

Among a spade of measures launched to stem the plunge, the central bank also took action and granted 120 billion yuan to China Securities Finance Corp, which provides margin financing loans to brokerages, according to Caixin.

The People's Bank of China will continue to support liquidity need, it said in a statement on Thursday, adding that the central bank has also granted the CSF to issue short-term bonds in the interbank market to replenish capital.