Chinese Stocks Surge on New Regulatory Boost

Chinese stocks gained on Thursday, driven by Beijing's plans encouraging insurance firms to invest in mainland shares. Key indices recovered as state-owned insurers were directed to boost investments, injecting substantial capital. Positive market responses were tempered by ongoing concerns about U.S. tariffs and China's economic outlook.

Chinese stocks experienced a positive uptick on Thursday following Beijing's announcement of measures to stimulate investment from the financial sector. The decision aimed to encourage insurance companies to purchase more shares listed on the mainland, resulting in a 0.6% rise in the blue-chip CSI300 index and a 1% climb in the Shanghai Composite Index by midday.

The financial sector, particularly insurance firms, outperformed the market with gains of 3.6% and 2.1% respectively. The stimulus package, outlined by six of China's financial regulators including the securities watchdog, mandates big state-owned insurers to increase their investments in domestic equities. This policy is expected to bring hundreds of billions of yuan each year in fresh capital.

Wu Qing, head of the China Securities Regulatory Commission, emphasized the plan's potential during a press conference. Despite market positivity, concerns linger regarding U.S. tariffs and China's economic performance. Furthermore, the plan anticipates bolstering mutual fund management of equity funds and promoting frequent share buybacks and dividends among listed companies.

(With inputs from agencies.)