Shanghai stocks rebound 2.2% to 3,686 as PBOC cuts buyback lending rate to 1%

The Shanghai Composite rose 2.2% to 3,686.17 on Wednesday, November 4, rebounding from the year's low recorded on Tuesday, according to the Associated Press. The advance came on the day a cut in the People's Bank of China (PBOC) relending rate for financing share buybacks and acquisitions took effect. The CSI 300 rose 2.3%, the STAR Market gained about 10%, ChiNext rose 6.4% and Hong Kong's Hang Seng added 1.7%. Market watchers cautioned that the rebound does not by itself prove a lasting turn. (Cover photo is a file photo of a stock market.)

Buyback relending rate cut to 1%, facility made permanent

The PBOC said on November 4 that it had stepped up its relending facility for share buybacks and stake increases: the rate was cut by 25 basis points to 1%, effective Wednesday, the tool was made a permanent part of its policy kit and eligibility was widened. The facility covers 21 national banks and five systemically important city commercial banks, with the central bank providing 100% refinancing support for one-year loans that can be extended. Banks submitted applications for more than 200 billion yuan (about $30 billion) in relending quotas after a meeting with financial institutions on November 2. Applications are not the same as loans approved or money already spent buying shares.

A rebound after a bruising October, with a caution attached

The support follows a bruising October in which the CSI 300 fell 8.5%, its worst monthly performance since early 2016, entering a bear market on October 20. On November 3 the PBOC had already run a 100 billion yuan swap facility operation for securities, fund and insurance firms, the third under that programme since October 2024; the Shanghai Composite had risen 1.08% that day to 3,638.03. Fund manager Bosera cautioned that the November 4 bounce could still be a technical rebound rather than a clear trend change. The October services purchasing managers' index, released November 4, came in at 50.8, down from 51.6 in September and below the market forecast of 51.7, still in expansion but slowing.