BEIJING: Chinese stocks swung between gains and losses as traders cut leveraged bets and turnover slumped, countering speculation of state support for equities.
The Shanghai Composite Index slipped less than 0.1 percent to 3,787.49 at the break, erasing a gain of as much as 0.3 percent and paring a loss of 1 percent. PetroChina Co. led declines for energy shares, while shipping companies extended a rally. A total of 513 companies were suspended from mainland exchanges on Thursday, or 18 percent of all listings, down from 518 at close of previous day.
The benchmark gauge halted a three-day rout Wednesday as stocks surged in the last hour of trading. Trading volumes in Shanghai have halved from their peaks in June, while margin debt, which had fueled a world-beating rally for China’s stocks, declined to a four-month low.
The drop in margin debt “means people are trying to get out of their positions,” said Michael Every, head of financial markets research at Rabobank Group in Hong Kong. “And if the market doesn’t drop, it suggests the PBOC is doing the buying. It seems they are in the market, just not everywhere at once. Usually at the end of the day, and where they seem to think it’s needed most.”
The outstanding balance of loans backed by share purchases fell by 0.6 percent to 881.7 billion yuan ($142 billion) on the Shanghai Stock Exchange on Wednesday, according to bourse data. That was the lowest level since March 16.
