BEIJING: China’s stocks fell, with the benchmark index heading for its worst monthly drop in almost six years, as the government struggles to rekindle investor interest amid a $3.5 trillion rout.
The Shanghai Composite Index slid 1 percent to 3,669.45 at the break, dragged down by energy and industrial companies. The gauge has tumbled 14 percent this month, the biggest loss among 93 global benchmark gauges tracked by Bloomberg, as margin traders cashed out and new equity-account openings tumbled amid concern valuations are unsustainable.
While unprecedented state intervention spurred a 18 percent rebound by the Shanghai Composite from its July 8 low, volatility returned on Monday when the gauge plunged 8.5 percent. Outstanding margin debt on mainland bourses has fallen about 40 percent since mid-June, while the number of new stock investors shrank last week to the smallest since the government started releasing figures in May. Individuals account for more than 80 percent of stock trading in China.
“The support measures may have been less effective than what Beijing imagined,” said Bernard Aw, a strategist at IG Asia Pte. in Singapore.
