Update | China’s support measures crumble as Shanghai stocks dive 8.5 per cent in biggest daily drop for 8 years
Government action to prop up stocks buckles under selling pressure as the Shanghai index suffers biggest one-day fall in eight years
Mainland stocks took another dive yesterday as the government's unprecedented measures to prop up the market seemed to peter out after managing to reverse a rout for three weeks.
The Shanghai Composite Index dropped 8.48 per cent, the biggest single-day fall in eight years and the second biggest on record. This was the first time the key index fell more than 5 per cent in a day since July 8, when Beijing stepped in to halt a crash that wiped out US$3 trillion from the value of the country's stocks.
The Hang Seng Index fell 3.09 per cent. All 50 stocks in the index ended down, with oil majors PetroChina and Sinopec Corp settling at 52-week lows.
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The H-share index lost 3.84 per cent.
The Shenzhen Composite Index dropped 7 per cent, while the ChiNext index of small-cap technology and medical stocks tumbled 7.4 per cent.
Turnover in Shanghai and Shenzhen fell to 1.39 trillion yuan (HK$1.76 trillion) from 1.66 trillion yuan on Friday. More than 1,700 stocks in the two exchanges fell by their daily 10 per cent limit, with only 78 ending higher.
Continuing the heavy-handed measures that stopped last month's rout, the China Securities Regulatory Commission last night said it was investigating two more firms that ran stock-trading platforms - Shanghai Mingchuang Software Technology and Zhejiang Hexin Tonghuashun Network Information.
The CSRC has opened a probe into Hundsun Technologies, a financial services software provider controlled by Alibaba Group Holding founder Jack Ma Yun, which connects small financial institutions with brokerages through its Homs platform.