Beijing: Continuing their freefall despite government measures, China's stocks tumbled sharply today as investor confidence shattered by the recent USD three trillion losses led to share-dumping to prevent further losses.
The benchmark Shanghai Composite Index sank 5.9 per cent to finish at 3,507.19 points while the Shenzhen Component Index slumped 2.94 per cent to close at 11,040.89points.
Losers outnumbered winners by 690 to 12 in Shanghai, and by 609 to 146 in Shenzhen.
More than 1,000 shares on the two bourses dived by the daily limit of 10 per cent.
More than half of the roughly 2,800 companies listed in Shanghai and Shenzhen had suspended trading as of today to avoid further losses, state-run Xinhua news agency reported.
Yesterday a total of 203 listed companies suspended trading. All industry groups lost ground, with aviation manufacturing, medical care, internet and transportation companies plunging by the daily limit of 10 per cent, the report said.
With the benchmark Shanghai stock index falling more than 30 per cent from June peak, Chinese government has unveiled a raft of supportive measures to prop up the market, but the efforts have done little to halt the decline so far.
It also ordered an inquiry to determine the reasons into precipitous fall.
Market analysts say that the losses since last few weeks amounting to an estimated USD 3.2 trillion were unprecedented.
The wave of listed companies seeking a suspension in trading comes at a time when Chinese have been suffering considerable losses over the past several weeks, state-run Global Times reported.
On Monday, Chinese Premier Li Keqiang said in a speech that China is confident and able to deal with the risks and challenges faced by its economy.
A series of unprecedented emergency rescue measures were implemented over the weekend, such as the suspension of the IPOs of 28 companies, allowing 21 Chinese brokerages to invest 120 billion yuan (USD19.3 billion) in blue-chip exchange- traded funds (ETFs) and Central Huijin, a unit of China's sovereign wealth fund, vowing to buy A-shares.
However only a limited number of blue-chip companies were able to directly benefit from the funds.
Today the government said Chinese insurance companies will be able to invest up to 10 per cent of their assets in a single "blue chip" stock, up from the previous five per cent.
Meanwhile, the state-backed China Securities Finance Co will "increase" stock purchases of small and medium-sized companies, with liquidity support from the country's central bank.
Separately, China's state asset regulator ordered the country's centrally administered state-owned enterprises (SOEs) not to sell shares in their listed companies amid "abnormal market volatility".
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