HONG KONG/BEIJING (Reuters) -China stepped up attempts to calm frayed investor nerves after a wild markets rout this week by telling foreign brokerages not to "overinterpret" its latest regulatory actions, setting the stage for a rebound in beaten-down stocks on Thursday. Chinese state media also joined in to say yuan-denominated assets in China remained attractive and that short-term market panic did not represent long-term value. China stocks had their best day in two months on Thursday.
Investors have rushed to exit bets on China's health sector this week, fearing that a regulatory crackdown that sparked panic selling in the tech and education sectors might hit the medical industry next. "Real estate, education, and healthcare are the three big mountains and the government inevitably has to tackle the issues," said Ming Liao, founding partner of Beijing-based private equity firm Prospect Avenue Capital. Selling has been fierce and although the Hang Seng healthcare index bounced 7% on Wednesday, it is still down about 11% for the week compared with a similar drop in the hard-hit Hang Seng Tech index and a 7.2% week-so-far plunge in the broader Hang Seng index.