China's largest insurers bought billions worth of stock on Monday, and markets are still moving lower

Guang Niu/Getty Images

Partially explaining the surge seen on the Shanghai Composite and CSI 300 indices, major Chinese insurers plowed tens of billions of yuan into blue chip exchange-traded funds (ETF) and large caps Chinese stocks on Monday in a bid to stabilise the country’s tumbling stock market.

Reuters, citing a report in the Shanghai Securities Journal earlier today, said China Life Insurance made a net purchase of 10 billion yuan in index funds while China Pacific Insurance Group and other major insurers each invested more than one billion yuan ($161.06 million) in ETFs and blue chips.

The moves came on the back of weekend reports that 21 top Chinese brokerage firms agreed to invest at least 120 billion yuan ($AU25.8 billion) in blue chip ETFs while 28 firms, scheduled to make initial public offerings, agreed to postpone their share listings. Central Huijin, a unit of China’s sovereign wealth fund, also announced it had recently bought ETFs and would continue to do so, according to Reuters.

On Monday the measures to support large-cap stocks did the trick, albeit after another wild session for investors. The benchmark Shanghai Composite rose 2.4% while the CSI 300 gained 2.9%.

However, it appears many remain unconvinced. Both indices are currently down more than 1% in early trade on Tuesday.

You can read more here.

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.