China stocks end higher as govt supports share buyback plans

Stocks in China snapped a five-session losing streak to end higher on Monday, after the securities regulator said it will make it easier for companies to buy back shares. The news lifted smaller-cap stocks, which have been under pressure with pledged share financing as the equity market tanked in October. The Shanghai Composite index closed 1.2 percent higher at 2,630.52. The blue-chip CSI300 index ended 1.2 percent firmer. The market closed lower for five straight sessions before trading commenced on Monday. CSI300's financial sector sub-index closed higher by 0.6 percent, the consumer staples sector ended down 0.4 percent, the real estate index closed up 1.5 percent and the healthcare sub-index ended higher by 1.2 percent. Notably, the start-up board ChiNext Composite index rallied to gain 3.5 percent, helping the Shenzhen index , which is smaller than its Shanghai counterpart, to drive up 2.5 percent. CSI300's information technology sub-index also jumped over 4 percent. The tech and small-cap rally came after the China Securities Regulatory Commission said on Friday it will simplify the procedure for listed companies to initiative a share buyback. "This mostly benefits small and private companies," said Zhang Gang, an analyst at Central Securities in Shanghai. "There seem to be a signal that restraints on private companies are being relaxed, and that there is a real desire [from authorities] to resolve the pledged shares issues." Shares amounting to 10 percent of total market capitalization in China have been pledged, mostly by small- and medium-sized companies, which have been hit by a slowing economy and the ongoing U.S.-China trade conflict.