Why China's Stock Market Rebounded 5.3% Today

China's stock market rebounded 5.3% today (Thursday) following a Wall Street rally on Wednesday.

The Shanghai Composite Index soared 156.30 points today to finish the session at 3,083.59. It was the index's biggest one-day gain since June 30. The smaller Shenzhen Index added 59.14, or 3.33%, to close at 1,832.58.

Markets across the region also finished firmly in the green. Japan's Nikkei closed up 1.1% at 18,574.55. Hong Kong's Hang Seng ended higher by 3.6% at 21,838.54.

Key European markets were all higher by more than 2% in early afternoon trading Thursday.

U.S. stocks jumped higher after the opening bell too. The Dow, S&P 500, and Nasdaq were all up more than 1% just minutes after the open. The Dow, which had been in correction territory, trimmed its year-to-date loss to 7.5% Thursday morning.

Today's rebound followed a terrible week for China's stock market.

Wednesday marked the fifth straight day of declines for the Shanghai Composite. The benchmark fell below 3,000 for the first time in eight months on Tuesday to close at 2,964.97. In the five days from Aug. 19 through Aug. 26, the index shed 23.3%.

With the market collapsing, the Chinese government stepped in and attempted to prop up the markets…

Government Steps In as China's Stock Market Tumbles

In an attempt to calm markets, China's central bank cut its key lending rate by 0.25% to 4.6% Tuesday. The People's Bank of China (PBOC) also reduced banks' minimum reserve requirement by 0.5%, effective Sept. 6. The move will add roughly 678 billion yuan (about $105.7 billion) into the Chinese economy.

And that's not the only move…

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