China to allow pension fund to invest in stock market for first time

State news agency reports 30% of net assets will be allowed to be invested in domestically listed shares, which could restore investor confidence

China has cleared the path for local authority pension funds to invest in the stock market for the first time, potentially channelling hundreds of billions of yuan into the country's struggling Shanghai exchange. After a week of turbulence that sent world stock markets spiralling to their worst weekly loss for the year, Xinhua, the official news agency, reported on Sunday that under the new rules, the fund will be allowed to invest up to 30% of its net assets in domestically listed shares.

The move, which is likely to be seen as a brazen attempt to inject pension cash into the market to shore up prices and restore investor confidence, comes ahead of several reports that are likely to show the world's major economies struggling to recover as China's main industries slowdown.

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