Mainland stock markets saw a strong rebound on Friday to end the week on a positive note as supportive measures from Beijing begin to take effect.

The benchmark Shanghai Composite Index gained 4.54 per cent to 3,877.80. The tech-heavy Shenzhen Composite Index rose 4.09 per cent to 2,035.26.

china stock market rebound
A photo posted by a Weibo user commenting on the stock market which shows Chinese Premier Li Keqiang laughing. The red comment says “fixed”. Photo: 刚哥 via Weibo

The party was only enjoyed by half of the listed companies, however, as over 1,300 shares across Shanghai and Shenzhen were still suspended. The companies halted trading voluntarily earlier this week amid massive selloffs to avoid further losses. According to Securities Daily, 67 companies applied to resume trading on Thursday when markets started turning positive again.

The rebounds came as Beijing continued pumping liquidity into the markets via the China Securities Finance Corp (CSFC).

The CSFC issued RMB80 billion worth of three-month bonds into the interbank market on Thursday, according to the 21st Century Business Herald citing unidentified sources. The bonds, with an interest rate of 4.5 per cent and minimum tradable unit of RMB1 billion, have been referred to as “rescue bonds” in Chinese media.

Other supportive measures include an administrative order to state-owned companies and their executives to buy more stocks.

Meanwhile, authorities are stepping up efforts to investigate “malicious short-selling.” On Thursday the Public Security Ministry and the China Securities Regulatory Commission (CSRC) started collecting evidence on allegations of short-selling against about a dozen institutions and individuals, according to China Securities Journal.

Over in Hong Kong, Hang Seng Index soared 508.49 points, or 2.08 per cent, to close at 24,901.28.

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Vivienne Zeng

Vivienne Zeng is a journalist from China with three years' experience covering Hong Kong and mainland affairs. She has an MA in journalism from the University of Hong Kong. Her work has been featured on outlets such as Al Jazeera+ and MSNBC.