Chinese leaders have asked a few of the country’s largest banks to help stabilize the bond market and buy debt securities. Their prices have fallen sharply as retail investors withdraw funds from fixed-income products as they switch to riskier assets as the country’s economic recovery prospects improve, Business Insider wrote. Foreign investors in the Chinese bond market are also interested in stabilizing the situation. 

Bonds have been falling since early November as investors saw signs that the economy is stabilizing due to the easing of the “zero tolerance virus” policy and began shifting money from fixed income products to riskier assets.The news also affected EURO-BUND Futures.

Such changes came after massive domestic protests in China in late November against the country’s tough health care policy imposed after the outbreak of the virus began in 2019.

That said, the impact of the intervention on the debt market has been limited so far, with bonds issued by local government funding bodies driving the mainland Chinese credit market lower on Wednesday, with yields on some bonds rising by 10 basis points.

Earlier, we reported that U.S. stock indices were down in trading today.