BEIJING: Chinese stocks tumbled again on Friday, taking the week’s losses to more than 10 percent, as the securities regulator said it was investigating suspected market manipulation amid increasingly desperate attempts by Beijing to head off a full-blown crash.
After a slump of nearly 30 percent in Chinese stocks since mid-June, the China Securities Regulatory Commission (CSRC) has set up a team to look at “clues of illegal manipulation across markets”.
A flurry of policy moves over the past week, including an interest rate cut and a relaxation of margin lending rules, have failed to arrest the sell-off.
“The government must rescue the market, not with empty words, but with real silver and gold,” said Fu Xuejun, strategist at Huarong Securities Co, adding that a market crash would hurt banks, consumption, companies and even trigger social instability. “It’s a disaster. If it’s not, what is it?”
The CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen dropped 5.4 percent to close at 3,885.92, while the Shanghai Composite Index .SSEC shed 5.8 percent to 3,686.92 points.
For the week, the CSI300 lost 10.4 percent and the SSEC fell 12.1 percent.
The Shanghai benchmark fell below 4,000 points on Thursday for the first time since April – a key support level that analysts had expected Beijing to defend.
The rout in China’s highly leveraged stock market has become a major worry for global investors, who fear a meltdown could destabilize the world’s second-largest economy at a time when growth is already slowing.
Chinese stocks had more than doubled between November and mid-June, fueled in large part by retail investors using borrowed money to bet on shares.
