Chinese shares has tumbled more than 8% after an unprecedented state rescue effort to prop up valuations abruptly stopped, raising doubts about the viability of Beijing’s plan to stave off a deeper crash.
Major indexes had their largest one-day drop since 2007, shattering three weeks of relative calm in China’s volatile stock markets since Beijing moved to arrest a slump that started in mid-June.
“The lesson from China’s last equity bubble is that, once sentiment has soured, policy interventions aimed at shoring up prices have only a short-lived effect,” said Capital Economics analysts.
The CSI300 index of the largest-listed companies in Shanghai and Shenzhen plunged 8.6%, to 3,818.73 points, while the Shanghai Composite Index lost 8.5%, to 3,725.56 points.
Stocks fell across the board on Monday, with 2,247 companies falling, leaving only 77 gainers.
More than 1,500 shares listed in Shanghai and Shenzhen dived by their 10 percentage point daily limit, led by index heavyweights such as China Unicom, Bank of Communications and PetroChina.
Wall Street has fallen for a fifth straight session, on renewed concerns about the stability of the Chinese share market.
China’s key Shanghai composite index dropped nearly 8.6 per cent yesterday, in its worst session since early 2007.
That resumed the slide that began in mid-June, but had been halted over the past three weeks by extensive measures by Chinese regulators.
Authorities insist they are still propping up the market, with the state-backed China Securities Finance Corp not withdrawing its support and the China Securities Regulatory Commission saying it will “continue efforts to stabilize market and investor sentiment, and prevent systemic risk”.
However, yesterday’s falls suggest that existing measures may no longer be enough.
i cant be any more blunter..this is a crash..in slo mo..the government cant control it..this was shown yesterday..perhaps the chinese PPT decided to have the day off?