On Tuesday Chinese stocks extended the sharpest rout since 1996 on lingering concerns that Beijing has trimmed market support.
The Shanghai Composite Index tumbled 7 percent to 2,986.07 at 2:13
p.m. local time, dropping below the 3,000 level for the first time in
eight months. The index has fallen 21 percent in the four days since
August 19. About 50 stocks fell for each one that rose on Tuesday.
The Hang Seng China Enterprises Index lost 3.3 percent, wiping out an earlier gain of 2.7 percent.
The CSI 300 Index gave up 6.7 percent, led by technology, industrial and
material companies.
The Hang Seng Index retreated 1.4 percent as a
gauge of price momentum dropped to the lowest since the October 1987 stock-market crash.
Hong Kong’s benchmark equity gauge is poised for its lowest close since July 2013.
About 17 percent of listed shares traded on mainland exchanges were suspended from trading Tuesday, little changed from Monday.
On August 14 China’s securities regulator hinted that the authorities will
pare back the campaign to buoy share prices as volatility falls. The
China Securities Regulatory Commission made no attempt to reassure
investors after Monday’s drop, unlike a month ago when policy makers released two statements shortly after an 8.5 percent drop, says Bloomberg.
Government intervention has failed to stop a more than $4.5 trillion collapse since June 12 amid fears the world’s second-largest economy is shrinking more than expected. A state agency employed by officials purchased more than $400 billion of stocks, selling by major shareholders has also been banned and officials also told state-owned companies to buy equities.
