(Nov 4): China escalated its defence of the stock market, as state-backed funds answered the government’s rallying call by increasing purchases and more companies stepped up buyback plans.

A basket of nine exchange-traded funds that are favoured by the so-called national team of investors drew RMB76.7 billion (RM46.68 billion) of inflows on Tuesday, according to Bloomberg-compiled data. That was the second largest on record. Turnover for those funds came in at around RMB83 billion on Wednesday, higher than in most sessions this quarter.

The funds have been accelerating purchases since last month but the spike in buying followed the government’s rollout of liquidity-injection measures this week aimed at reinvigorating the market. The tech-heavy Star 50 Index surged nearly 10% on Wednesday, its best session since July, also boosted by news that Chinese AI developers may receive just a fraction of the advanced Nvidia Corp chips, potentially fuelling demand for domestic alternatives.

“The latest developments in the market point to Beijing’s growing recognition that more support is needed,” said Homin Lee, senior macro strategist at Lombard Odier in Singapore. “At the same time, the authorities seem to focus more on technical tweaks,” suggesting a perception that the status quo is roughly manageable, he added.

The CSI 300 Index gained more than 2%. The rebound also tracked a broad move higher in Asia as investors digested the US midterm election results and considered the latest selloff as excessive.

Chinese companies are also being enlisted in the effort to shore up confidence. CXMT Corp's chairman proposed Wednesday to increase the size of its share buyback to between RMB2.5 billion and RMB5 billion, saying the move was intended to protect investors’ interests and bolster confidence.

In a rare move in the market, Suzhou Dongshan Precision Manufacturing Co’s controlling shareholders have proposed returning at least RMB1 billion to investors in 2026 through cash dividends and share buybacks.

The buyback plans came after the People’s Bank of China said it would cut the rate on its relending facility to 1% from 1.25%, make the programme permanent and encourage banks to increase lending. The facility provides low-cost central bank funding to banks for loans that finance companies’ share buybacks and stake increases by major shareholders.

Chinese banks have already submitted applications for more than RMB200 billion of relending quotas, the PBOC said.

Meanwhile, several other mainland-listed companies — including Ningbo Joyson Electronic Corp, Universal Scientific Industrial Shanghai Co and Hwatsing Technology Co — disclosed new share buyback plans. Ningbo Joyson proposed buying back between RMB150 million and RMB300 million, according to its filing.

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