Chinese stocks dipped on Thursday morning in calm trading, following two days of high volatility, as investors saw signs of fresh support from the government.
In an apparent move to boost investor confidence, roughly 30 Chinese listed companies, many small-caps, have disclosed holdings by government-backed investors since Tuesday’s market slump of more than 6 per cent.
The surge in those shares partly offset falls in blue-chips, which were a drag on the main indexes on Thursday.
The CSI300 index was down 0.4 per cent to 3,872.16 points at the end of the morning session, while the Shanghai Composite Index lost 0.4 per cent to 3,779.10 points.
But the sentiment in Hong Kong was hit by weak global markets.
The Hang Seng index dropped 1.3 per cent to 22,878.61 points, while the Hong Kong China Enterprises Index lost 1.7 per cent to 10,462.39.
Investors chased companies with investments from state-backed investor Central Huijin, and state margin lender China Securities Finance Corp (CSFC), which was tasked with propping up share prices during crisis.
Small-caps including textile dyes maker Shanghai Anoky Group and optical product maker SVG Optronics Co Ltd saw their shares surge after disclosure of investment by Huijin, which has traditionally invested in big financial institutions.
Exchange filings also revealed that Huijin is now the biggest institutional investor in Shanghai Taisheng Wind Power Equipment Co and Wuhu Token Sciences Co Ltd , a maker of vacuum thin film materials for panel displays, boosting shares in the companies.
But many shares without government support fell.
A total of 1,215 stocks declined at midday, while there were 1,146 gainers.