Monday August 31, 08:30 PM

China may try to stabilise stock market - report

BEIJING (Reuters) - China may soon take steps to help stabilise the domestic stock market, a state magazine reported on Monday, though it did not say whether the intention would be to keep the market in its current range or to promote a rebound.

China's benchmark stock index has fallen for four straight weeks and is down nearly 20 percent over that time, mainly driven by worries over tighter liquidity.

"The measures could include reducing short-term bills issued by the central bank to absorb liquidity and accelerating the approvals of new shares and new funds," the China Economic Weekly quoted an unnamed source close to regulators as saying.

Fewer bill sales and the approval of more investment funds would likely boost share prices, but a big increase in share issuance would place downward pressure on it.

The China Economic Weekly, run by the People's Daily, said any moves to stabilise the market would not be with a view to strengthening the market ahead of Oct. 1, the 60th anniversary of the founding of the People's Republic of China.

There has been some chatter among investors about whether authorities would intervene to ensure the stock market is in good health come the politically sensitive National Day.

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