Stocks in China are on free fall right now, and things are not looking good.
Markets across Asia followed China’s key share indexes into the red today despite further efforts from Beijing to stave off the relentless fall in Chinese share prices.
A short time ago the benchmark Shanghai Composite was down more than 5% for the day, having fallen as much as 7%, while the SSE 50 index of the top 50 stocks on the bourse was down more than 7%. The CSI 300 of the largest listed firms on the Shanghai and Shenzhen exchanges was down 7%.
Authorities admitted panic selling had taken hold among Chinese investors.
A China Securities Regulatory Commission spokesman said markets were “full of panic emotion and the number of irrational selling has been increasing”, according to a report in the South China Morning Post.
One-third of the value of Chinese stocks has now been wiped off in three weeks.
The declines come despite a raft of measures from Chinese policymakers in recent weeks designed to boost stock prices. Interest rates have been cut, rules augmented to discourage selling while brokers, asset managers and Chinese insurers have all outlined plans to increase their exposure to the stocks.
More than 1000 listed Chinese companies have temporarily suspended trade on Wednesday in an attempt to avoid the market carnage. While they have escaped the declines for the moment, those firms that are still trading are feeling the full brunt of selling pressure.
The carnage in China is now spreading to other markets across the region. The Hang Seng in Hong Kong has slumped more than 4% while the Nikkei 225 in Japan and ASX 200 in Australia are off by more than 1.1%.
People's Bank of China is saying that it will support market stability by providing liquidity.
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