CHINA’S State-backed funds sold bank shares as the benchmark equity index jumped to a seven-month high earlier last week, according to sources.

    China Securities Finance Corp. (CSF) and other government-linked funds sold bank shares Tuesday last week, the sources said. While the sources said State funds were net sellers of stocks Tuesday, it’s unclear how unusual the selling was or whether it continued.

    The move by CSF, which was armed with more than US$480 billion to prop up share prices during last summer’s rout, may signal confidence among Chinese policymakers that the domestic stock market is growing strong enough to stand on its own.

    CSF’s biggest holdings at the end of last year were in financial companies, whose heavy weightings in benchmark indexes make them prime candidates for government intervention.

    “CSF stepped in to support the market when stocks plunged. It’s now doing the opposite by selling shares when the market surges,” said Dai Ming, a fund manager at Hengsheng Asset Management Co. in Shanghai. (SD-Agencies)