China stocks give up year's gains as 'national team' stays on bench

Mon Aug 24, 2015 6:36am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Pete Sweeney

SHANGHAI (Reuters) - China stock markets slumped again on Monday, giving up all their gains for the year on a massive selloff that dragged down regional markets, with even some state media saying the government rescue attempt had now failed.

Chinese markets were down more than 9 percent during the day and had only slightly recovered by the close of trade, the worst daily performance since 2007 and a hair's breadth from the worst day since 1996, with traders blaming regulators' failure to act over the weekend after markets lost 11 percent last week.

The downside was limited mostly by rules preventing any given stock from losing more than 10 percent a day, and by the fact that many company shares are still under trading halts.

As much as 80 percent of China's tradable stocks hit the downside limit during the day, and ominously all index futures contracts, for the CSI300, CSI500 and SSE50 indexes were down the maximum 10 percent.

After a year of heady gains, Chinese markets have been buffeted by increasing signs that economic growth is faltering, and central government's efforts to reassure and backstop stock investors have been sunk by a succession of weakening indicators.

Exchanges not only gave up all the gains made from Beijing's unprecedented stock market rescue in July, in which hundreds of billions of state dollars were ordered into the market, but have also now for the first time entered negative territory for the year.

The CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen fell 8.8 percent to 3,275.53 points and is now down over 7 percent for the year, while the Shanghai Composite Index .SSEC lost 8.5 percent to 3,209.91 points, its lowest level since March and down less than a percentage point for the year.

The Hang Seng index .HSI fell 5.2 percent to 21,251.57, and other major Asian markets slumped as global investors grow increasingly concerned at signs that Beijing's policymaking has grown not only more erratic but less effective.   Continued...

 
A passerby walks past a panel displaying China stock indexes at the financial Central district in Hong Kong, China August 24, 2015.  REUTERS/Bobby Yip