New | China market regulator and central bank expand rescue plan to stop panic selling in equities

Chinese authorities expanded their market rescue package to cover smaller counters to stop panic selling as markets in Shanghai and Shenzhen continued to tumble on Wednesday.

“The stock markets now are full of panic and the amount of irrational selling has been increasing. This has led to intense liquidity in the market,” said Deng Ge, spokesman for the market regulator, China Securities Regulatory Commission.

“To restore the market to normal, China Securities Finance will continue to stabilise the share prices of blue chips while increasing its buying of small- and medium-sized company stocks in a bid to calm the nervous market situation.”

“The CSRC has also decided that China Securities Finance will support securities brokerage firms, giving them sufficient liquidity to make sure the market will be stable.”

The country's central bank, the People’s Bank of China, said would support the CSRC's plan. 

“For the purpose of supporting the stock market's stable development, the People’s Bank of China will actively assist China Securities Finance in getting liquidity by way of repos, collateral lending or issue financial debt papers,”  the PBOC said in a statement posted on its website on Wednesday.