Chinese stocks
tumbled again on Friday, taking the week's losses to more than 10
percent, as the securities regulator said it was investigating suspected
market manipulation and announced a slew of measures aimed at heading
off a full-blown crash.
After
a slump of nearly 30 percent in Chinese stocks since mid-June, the
China Securities Regulatory Commission (CSRC) has set up a team to look
at "clues of illegal manipulation across markets".
After market close, a CSRC spokesman said China would cut initial public offerings and capital raisings and support long-term investors entering the market to help stabilize prices.
It also said China's official margin lender for brokerages, which makes loans available for stock market investment, would boost its capital base to 100 billion yuan ($16 billion) from 24 billion yuan to expand its business.
A flurry of policy moves over the past week, including an interest rate cut and a relaxation of margin lending rules, had failed to arrest the sell-off.
The People's Bank of China (PBOC) also rolled over 250 billion yuan of medium-term loans to banks late on Friday to ensure adequate liquidity in the system.
"The government must rescue the market, not with empty words, but with real silver and gold," said Fu Xuejun, strategist at Huarong Securities Co, before the CSRC and PBOC announcements, adding that a market crash would hurt banks, consumption, companies and even trigger social instability. "It's a disaster. If it's not, what is it?"
The CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen dropped 5.4 percent to close at 3,885.92, while the Shanghai Composite Index .SSEC shed 5.8 percent to 3,686.92 points.
Hong Kong's Hang Seng index .HSI fell 0.8 percent to 26,064.11. For the week, the CSI300 lost 10.4 percent and the SSEC fell 12.1 percent.
The rout in China's highly leveraged stock market has become a major worry for global investors, who fear a meltdown could destabilize the world's second-largest economy at a time when growth is already slowing.
After market close, a CSRC spokesman said China would cut initial public offerings and capital raisings and support long-term investors entering the market to help stabilize prices.
It also said China's official margin lender for brokerages, which makes loans available for stock market investment, would boost its capital base to 100 billion yuan ($16 billion) from 24 billion yuan to expand its business.
A flurry of policy moves over the past week, including an interest rate cut and a relaxation of margin lending rules, had failed to arrest the sell-off.
The People's Bank of China (PBOC) also rolled over 250 billion yuan of medium-term loans to banks late on Friday to ensure adequate liquidity in the system.
"The government must rescue the market, not with empty words, but with real silver and gold," said Fu Xuejun, strategist at Huarong Securities Co, before the CSRC and PBOC announcements, adding that a market crash would hurt banks, consumption, companies and even trigger social instability. "It's a disaster. If it's not, what is it?"
The CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen dropped 5.4 percent to close at 3,885.92, while the Shanghai Composite Index .SSEC shed 5.8 percent to 3,686.92 points.
Hong Kong's Hang Seng index .HSI fell 0.8 percent to 26,064.11. For the week, the CSI300 lost 10.4 percent and the SSEC fell 12.1 percent.
The rout in China's highly leveraged stock market has become a major worry for global investors, who fear a meltdown could destabilize the world's second-largest economy at a time when growth is already slowing.
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