BEIJING: Chinese stocks pared losses in volatile trading as Bank of China Ltd. and other large financial companies climbed following Monday’s rout. Commodity producers declined.
The Shanghai Composite Index dropped 1 percent to 3,688.48 at the 11:30 a.m. break, after sinking as much as 5.1 percent and gaining 1 percent. About three stocks fell for each that rose. Bank of China advanced 1.5 percent, while China Coal Energy Co. led energy shares lower. The gauge tumbled 8.5 percent on Monday amid concern a three-week rally sparked by unprecedented government intervention is unsustainable.
Chinese traders reduced leveraged stock bets on Monday by the most in two weeks as the stock plunge erased $613 billion in value. The securities regulator assured investors in a statement after the market closed the government hasn’t withdrawn support for equities.
“Confidence is very weak and the market will probably still seek a lower level of support,” said Wu Kan, a Shanghai-based fund manager at Dragon Life Insurance Co., which oversees about $3.3 billion. “Big caps like banks are rising as undoubtedly, the state funds are buying them to prop up the broader market. If the market falls to or approaches the previous low, the government will take further rescue measures.”
Hong Kong’s Hang Seng Index climbed 1.6 percent at 11:34 a.m., after dropping to its lowest level in three weeks on Monday. The Hang Seng China Enterprises Index advanced 0.5 percent. The CSI 300 Index retreated 0.2 percent, paring a loss of as much as 5 percent.
