BEIJING: China stocks suffered their sharpest daily percentage decline since 2007, as worries mount that authorities are pulling back on measures to prop up the market.
The Shanghai Composite Index ended down 8.5% at 3725.56, its second-straight day of losses and worst daily percentage fall since February 27, 2007. China’s main index is up 6% from its recent low on July 8, but still off 28% from its high in June.
The smaller Shenzhen Composite fell 7% to 2160.09 and the small-cap ChiNext Closed 7.4% Lower at 2683.45
Analysts say the selling came as investors fear the government is curbing its purchases of blue-chip stocks—and could even be testing whether the market can support itself.
“The previous support from government funds is apparently unsustainable,” said Fu Xuejun, a strategist at Huarong Securities. Authorities may want to “test whether the market has recovered its resilience. The government wants to use state funds to stabilize the market, not to prop it back to 5000 points overnight.”
