Chinese stocks made big gains for a second consecutive day Friday, but there are lingering concerns the market instability has only just begun to hurt the world's second biggest economy.
The benchmark Shanghai Composite Index ended up 4.5 percent. It made similar gains Thursday after the government announced several new measures to stop a rout that had wiped out nearly 30 percent of the market since mid-June.
Beijing in the past two weeks has cut key interest rates, eased restrictions on stock purchases, and ordered large shareholders not to sell shares for the next six months. Around 1,400 listed mainland companies, or around 40 percent of the market, have halted trading.
Though investors welcomed the moves to stop the market slide, there are fears the mass sell-off will continue once the suspended shares resume trading and the official support measures are relaxed.
Some also fear the market turbulence will ripple to other parts of China’s economy.
In a research note Friday, Bank of America Merrill Lynch said the stock market crash would eventually hit the real economy and “will likely hurt consumption down the road.”
But the crash is likely to have only a “small” impact on China’s economy, according to International Monetary Fund chief economist Olivier Blanchard. “There is no particular reason to have lost confidence,” he said Thursday.
Elsewhere in Asia, stocks were mostly up, with slight gains reported in South Korea, Australia and Hong Kong, though Japan closed nearly half a percent lower.