China stocks snapped a three-day streak of losses on Wednesday, helped by a rally in resources shares. The bluechip CSI300 index rose 0.5 percent, to 3,475.75 points, while the Shanghai Composite Index gained 0.7 percent to 3,222.24 points. The indexes were flat at midday. Industry-leading bluechips were still trading near recent lows after China's securities regulator warned about "barbaric" take-over deals by asset managers using illegal funds.
News that China's local government pension fund is moving one step closer to investing in the stock market provided some relief, raising hopes that e typically longer investment strategy of the fund will foster stability and raise liquidity. China has selected 21 investment management institutions for its pension insurance fund, bringing it one step closer to investing up to $290 billion in its financial markets.
A broad rally in commodities, in particular in coke, coking coal, iron ore and rebar, boosted share prices in steelmakers, coal miners and other resources companies. On day three of Shenzhen-Hong Kong Stock Connect, Shenzhen shares continued to outperform, as data showed strong net inflows into the tech-heavy market. Most sectors gained ground, led by materials and consumers.
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