Stocks rebound after central bank injects record liquidity

An investor watches an electronic board showing stock information at a brokerage office in Nanjing, Jiangsu province, Jan 29, 2016.[Photo/IC]

Stocks rallied on Friday, as the central bank injected a record liquidity this week to tide over shortages which often accompany Chinese New Year holiday.

The benchmark Shanghai Composite Index climbed 3.1 percent to close at 2,737.60, while the Shenzhen Component Index gained 3.7 percent to 9,418.20.

Brokerage, telecommunication and computer device companies led the advance. Everbright Securities and Haitong Securities surged 7.1 and 6 percent respectively. CITIC Securities, Merchants Securities and Guosen Securities jumped more than 5 percent. Founder Technology Group added 4 percent.

The People's Bank of China conducted 100 billion yuan reverse-repurchase operation on Friday, adding this week's injection via the lending tool to a record 690 billion yuan, reported Bloomberg. The benchmark money-market rate fell to a six-week low.

Stocks rose for the first time in four days as investors speculate the steepest monthly selloff since the global financial crisis might be overdone. The Shanghai gauge edged below the 2,700 mark, closing as low as 2,655.66 on Thursday.

The CSI Index tracking some of the largest-cap stocks in Shanghai and Shenzhen edged up 3.2 percent to 2,946.09 as of Friday closing.