Shares rise on expectations of government aid

The Shanghai Composite Index rose 7.6% on Wednesday to close at 2523.28 points, in response to reports that Beijing might step in to help flagging stock markets, the Wall Street Journal reported. The paper cited sources familiar with the matter as saying that the government may take action to offset an influx of previously nontradable shares as their lockup period ends. The China Securities Regulatory Commission is mulling a plan to funnel some of these shares through brokerages in order to prevent direct share sales from flooding the market and driving down prices. Frank Gong, JPMorgan’s chief China economist, also said the government may be considering a stimulus package worth up to US$58.4 billion to support the capital markets and the housing market.