Chinese efforts to stem stock-market plunge failComments Off on Chinese efforts to stem stock-market plunge fail
Over the weekend Beijing stopped 28 companies that were due to list from selling shares on the Shanghai stock exchange.
The People’s Bank of China is also providing cash for state-backed margin lender China Securities Finance Corp, and 21 of the country’s largest brokers said they would be buying 120 billion yuan (£12.3 billion) of shares.
But the Shanghai market only closed up 2% today, after an initial rise of 8% in early trading.
The steep early jump also only managed to last an hour, before falling back to a 3.23% rise, and even touching negative territory before finally closing up 89 points to 3775.91.
The Shanghai Stock Exchange Composite Index pulled back from earlier gains (Picture: Thomson Reuters)
The Shenzhen Component Index, which is made up of small and medium-sized companies, ended the day down by 1.39% at 12,075.77.
The Chinese markets had been some of the best-performing in the world in recent years, hitting a seven-year peak last month. Shanghai rose more than 150% in just 12 months.
But in the past three weeks the Shanghai and Shenzhen markets have plunged 29% and 32% respectively, as an unwinding of debt positions wiped £1.8 trillion off the market values over the period.
Previous efforts by the Chinese government to keep the country’s share prices from falling, including interest rate cuts and plans to investigate short-sellers, have also failed.