SHANGHAI: China stocks closed up after touching their lowest in nearly five years, as some exchange-traded funds(E TFs) tracking key indexes saw spikes in daily turnovers, suggesting state-backed funds may be lending support.

China’s blue-chip CSI300 Index closed up 1.4%, after slumping to its weakest since early 2019 in the morning session, while the Shanghai Composite Index gained 0.4%.

Several large-cap ETFs that are favoured investment tools by these state-backed funds, dubbed “national team” investors, saw a spike in trading volume on Thursday, signalling support from such institutions.

“Turnover for ETFs tracking CSI300 spiked again. This could be due to some national team effort to support the market from breaching below key index levels,” UBS analysts said in a note.

Daily turnover of Huatai-PB CSI 300 ETF surged to 15 billion yuan ($2.1 billion) on Thursday, the highest since 2015. This also compares with an average daily turnover of 4.5 billion yuan for the past month.

E-Fund CSI 300 Index ETF saw a record high daily turnover of 5.6 billion yuan.

Foreign capital recorded net selling of just 741 million yuan ($72.1 million) via the Stock Connect’s northbound trading link, after logging the largest net sell in more than a year on Wednesday.

Consumer-related names were leading gains, with China Tourism Group Duty Free Shop and liquor giant Kweichow Moutai up 6.3% and 2.1%, respectively.

In Hong Kong, the market recovered from Wednesday’s turmoil, with the Hang Seng Index up 0.8%.

Technology shares added 0.5%, with Meituan and Alibaba both up 1.5%.

Meanwhile, analysts say China’s stock market remains under pressure, given the country’s patchy economic growth and lack of fresh stimulus.

“Big rate cuts or quantitative easing were unlikely and authorities should rely more on fiscal policy to boost the economy,” UBS chief China economist Tao Wang said in an investor call on Thursday.