(Yicai) July 22 -- Central Huijin Investment, a sovereign wealth fund set up by China's central bank, boosted its holdings of mainland-listed exchange-traded funds by at least CNY190 billion (USD26.4 billion) in the three months ended June 30, The Paper reported yesterday, citing data from fund managers such as E Fund Management and Harvest Fund Management.

China’s stock markets have staged a noticeable comeback in the second quarter, after they were badly hit by the United States’ new tariffs on trade that were rolled out in early April.

The Shanghai Composite Index plummeted 7.3 percent on April 7, the day the reciprocal tariffs were announced, to close at 3,069.58. During the day, it sank to a year-to-date low of 3,040.69. While the Shenzhen Component Index plunged 9.6 percent to close at 9,364.5 that day, and two days later, it slumped to a year-to-date low of 9,119.60.

Both indexes have since bounced back sharply. Today the Shanghai Composite Index closed up nearly 18 percent from April 7 to close at 3,581.86 and the Shenzhen Component Index finished the day up 15 percent at 11,099.83.

Central Huijin remains optimistic about the long-term outlook for China's capital markets and is confident of the value of mainland-share allocations, the Beijing-based company said on April 7. The sovereign fund has once again increased its holdings in ETFs and will continue to do so in the future to help keep markets stable.

Central Huijin is a wholly state-owned investment company and holds stakes in more than 20 major Chinese financial institutions. The firm plays a role similar to that of a "stabilization fund" in the capital markets. Since 2008, Central Huijin has stepped in several times to support the capital markets during turbulent times.

Editor: Kim Taylor