Stock markets continue to slide
Print Edition
CHINESE stocks continued to lose ground yesterday despite government efforts to shore up investor confidence after the biggest one-day drop in eight years on Monday.
Chinese regulators said they were prepared to buy shares to stabilize the stock market, while the central bank injected cash into money markets and hinted at further monetary easing.
However, the benchmark Shanghai Composite Index dropped 1.68 percent to end the day at 3,663 points, narrowing from a loss of as much as 5.05 percent in the morning session.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, ended 2.24 percent down, or 48.39 points, at 2,111.70 on turnover of 618.8 billion yuan (US$99.6 billion).
PetroChina Co, the biggest stock by market value, fell 4.2 percent to 11.85 yuan.
Most shares declined while brokerages gained to offset the decline, with Guosen Securities jumping by the daily limit of 10 percent to 21.74 yuan and Orient Securities up 9.2 percent to 25.38 yuan.
After the market closed yesterday, China’s top securities regulator said it was looking into the massive sell-off on Monday that had dragged the Shanghai index down 8.5 percent in its biggest daily loss since 2007.
On Monday, the government tried to reassure investors by saying that the China Securities Financial Corp would buy more shares at proper times, denying media reports that it had withdrawn supportive policies.
The People’s Bank of China yesterday injected 50 billion yuan into the money market through seven-day reverse repurchase agreements.
The central bank also said in an online statement that it would maintain “appropriate levels of liquidity.”
“Investor confidence is feeble amid wild volatility. The central bank’s move is obviously aiming to stabilize the capital market,” said Li Qilin, an analyst with Minsheng Securities.
Zhang Yan, an analyst with Central China Securities, said: “As indicated by increasing trading turnover, bargain-hunting funds have started to flow back to the market. That’s a sign of stabilization.”
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