BEIJING: A swift, steep drop in China shares flipped to gains Wednesday, the latest signal that Beijing won’t let the market fall too sharply before engineering a rescue.
The Shanghai Composite Index SHCOMP, +1.23% which fell as much as 5% earlier, ended up 1.2% at 3,794.11, and the smaller Shenzhen Composite 399106, +2.19% gained 2.2% to 2,222.05. The startup-dominated ChiNext board gained 2.7% to 2,570.69.
Meanwhile, the volatility hitched off further losses in Hong Kong’s Hang Seng Index HSI, -1.16% down 1%, which has wiped out all year-to-date gains. A gauge of Chinese companies listed in the city also is down 1%.
China’s trading partners in the region also racked up losses. Japan’s Nikkei Stock Average NIK, -1.61% fell 1.6% while South Korea’s Kospi SEU, -0.86% fell 0.9%.
Earlier Wednesday, China’s main stock index, which has shed 30% since its June peak, fell within a whisker, some 51.2 points, from the low set on July 8 — before Beijing’s massive stock-rescue operation that spanned from directing state funds to buy shares to halting initial public offerings and sending police after “malicious” short sellers kicked into gear. On Tuesday, the central bank poured a huge amount of cash into the financial system to offset capital flight after devaluing the yuan.
