Beijing, China—China’s stock market rose on Tuesday, as investors rushed to buy stocks to avoid falling further amid the fallout from the US presidential election, and China’s central bank said it would ease capital controls in the wake of Trump’s victory.
The People’s Bank of China’s stock index rose more than 5% in after-hours trading.
The rally was fueled by the president’s recent visit to China and by a rally in foreign bond yields, with the yield on 10-year government bonds jumping from 3.3% to 4.1%.
Chinese stocks have risen by about 2% over the past week.
Trump’s campaign had sought to boost stocks by raising concerns about the threat of terrorism, while China’s economy and government have been in the spotlight since Trump’s election.
On Monday, the China Securities Regulatory Commission warned that capital controls would remain in place as early as Wednesday, according to Reuters.
The country’s stock exchange said in a statement that it would lift capital controls on October 1 and allow the government to buy more assets to buy up shares in the future.
That would boost the stock market’s value by about 7% this year, according the Shanghai Composite Index, which rose more by 6.2% on Monday.
A central bank statement said China would continue to tighten capital controls as long as necessary and would consider easing them in the event of terrorist attacks.
“The risk of market contagion will be limited, especially if we see a change in the direction of economic developments,” the central bank wrote.
The yuan rose after Trump’s visit.
The dollar was up 0.5% at 102.13 Chinese yuan = $1.0615 US.
On Tuesday, the yuan gained 0.4% to 102.15 Chinese yuan= $1,0878 US.
In Shanghai, the Hang Seng Index of the country’s benchmark index of stocks gained 0,965.04 points to 3,854.59.
The Hang Siang index of the S&P 500 index of benchmark index stocks fell 0,769.96 points to 2,821.94.
The Shenzhen Composite Index of Hong Kong’s benchmark Index of stock companies was up 3.5%, while Shanghai Composite index was up 1.3%.