Beijing’s support measures fail to arrest China’s stock market slide
Mainland and Hong Kong indices fall to new recent lows as central government rescue measures fail to restore investor confidence
Mainland shares traded lower yesterday, raising the risk of wider economic fallout and testing Beijing's resolve to pull all available policy levers to stop the slide.
The government's rescue measures failed to restore confidence. The Shanghai Composite Index fell again, shedding 1.3 per cent, or 48.8 points, to 3,727.1. The Shenzhen Component Index dropped 5.8 per cent, or 700.2 points, to a nearly five-month low of 11,375.6.
Hong Kong's Hang Seng Index slid below the 25,000 mark, falling for three straight sessions, to hit its lowest level since March 31. Losing 1.03 per cent, or 260.97 points, the index yesterday closed at 24,975.31. The Hang Seng China Enterprises Index, which tracks Hong Kong-listed mainland shares, shed 3.30 per cent, or 404.13 points, to 11,827.30.
"The key level that Beijing is striving to protect for the Shanghai benchmark is 3,600, though we are not optimistic given that most measures to arrest the slide are already on the table," said Linus Yip, chief strategist at First Shanghai Securities.
Some blue chips, in particular banks, managed to climb thanks to reports that 21 mainland brokerages had shifted over 128 billion yuan (HK$162 billion) into a stabilisation fund to buy index trackers.
Yet the sell-off in other shares, in particular small and medium-sized companies, continued unabated. The ChiNext Price Index, China's version of the tech-heavy Nasdaq board, fell 5.7 per cent to 2,352.01, the lowest in nearly four months.
A total of 745 stocks, or 26 per cent of the companies listed on the mainland, suspended trading yesterday.