Comments
China stocks slumped again on Friday, taking their three-week tumble to nearly 30 per cent and wiping out most of this year's gains, prompting regulators to launch investigations into suspected market manipulation.
The Shanghai Composite Index plummeted more than 7 per cent at one point in early trade. It ended the morning session down 3.3 per cent at 3.785.6 points, heading for a weekly loss of nearly 10 per cent.
The CSI300 Index was down 2.4 per cent at 4.009.6, after sliding close to 8 per cent earlier.
"This is a stock disaster. If it's not, what is it?" said Fu Xuejun, strategist at Huarong Securities Co.
"The government must rescue the market, not with empty words, but with real silver and gold," he said, saying a full-blown market crash would endanger the banking system, hit consumption and trigger social instability.
Comments from the central bank and Premier Li Keqiang on Thursday did little to calm panicky investors. The central bank vowed to guard against systemic financial risks, while Premier Li called for a stable and healthy capital market.
The remarks were quickly overshadowed by a statement from the China Securities Regulatory Commission (CSRC) early on Friday it had set up a team to look at "clues of illegal manipulation across markets."
Signalling the start of the hunt for someone to blame, the China Financial Futures Exchange (CFFEX) suspended 19 accounts from short-selling for one month, sources with direct knowledge said on Friday.
David Dai, Shanghai-based investment director at Nanhai Fund Management Co Ltd said short-selling in the index futures market was to be expected, because many institutions had no choice but to hedge risks using futures during the rapid market fall.
But their actions may have sent a signal of pessimism to traders in the spot market, triggering a vicious cycle.
Stocks fell across the board on Friday, but banking and brokerage stocks posted the smallest drop among major sectors.
Index heavyweight PetroChina rose 0.3 per cent, fuelling speculation that state-backed investors are stepping in a bid to anchor market sentiment.
Top managers of 28 companies listed on Shenzhen's growth board ChiNext, including Qingdao TGOOD Electric Co said on Friday they would actively buy back shares or increase holdings in their companies to help stabilise the stock market, and called on their listed companies to do the same.
Hong Kong stocks also fell as the Greek debt crisis and China's market slump curbed investors' risk appetite.
The Hang Seng index dropped 0.2 percent to 26,222.77, while the Hong Kong China Enterprises Index lost 1.0 percent, to 12,661.29.
Most sectors fell, but energy and telecommunication shares gained.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.