China insurance firms invest $1.6 bln in bank stocks, funds-media

China's insurance sector has invested 10 billion yuan ($1.6 billion) in mutual funds and local stock markets, focusing mainly on banks and technology shares, following the recent market rout, local media reported on Friday.

The firms had entered the market because they believed some good bargains had surfaced following the sharp falls due to the global market turmoil, while expectations that the stock markets may be nearing a bottom also encouraged buying, state-owned China Securities Journal reported, citing one unidentified source at an insurance company.

News of massive funds entering the market first surfaced in a report in the Economic Observer on Thursday, which cited unnamed sources as saying China's National Social Security Fund has piled in billions into the local markets.

The speculation helped reverse earlier losses on China's benchmark stock index and led it to close 1.3 percent higher.

Separately, the Shanghai Securities News cited unidentified sources at an insurance company as saying the firm had invested billions in local shares, while another unnamed source from a major insurance firm said the company was favouring emerging sectors encouraged under the government's 12th five-year plan, such as the electronic and information technology industry.

($1 = 6.394 Chinese Yuan)