Chinese authorities have escalated their market intervention in a bid to prop up stocks after $590bn was wiped off shares on Monday. Beijing’s state-owned financial institutions hoovered up shares, and regulators extended a selling ban on major companies, to quell investor fears after a tumultuous start to 2016 trading.
The main Shanghai Composite index of shares fell just 0.3pc on Tuesday, while the smaller Shenzen Composite declined less than 2pc, after bleeding 8.2pc at the start of new year trading. The People’s Bank of China also pumped in 130bn yuan ($20bn) into the financial system, its largest single injection of liquidity since September.
The measures came after Chinese stocks saw the worst ever start to the year, with shares in the blue-chip CSI300 falling by 7pc on Monday. This triggered an automatic “circuit breaker” mechanism, where trading was halted in a bid to dampen volatility. FULL REPORT
