Measures by Beijing to stem the plunge in China’s stock markets stopped a three-week rout, but failed to give the much-needed boost officials were hoping for.
Over the weekend the government stopped 28 companies that were due to list from selling shares on the Shanghai stock exchange.
The People’s Bank of China, the central bank, is also providing cash liquidity for the state-backed margin lender China Securities Finance Corp, and 21 of the country’s largest brokers said they would be buying 120 billion yuan (£12.3bn) of shares.
But the Shanghai market closed only 2 per cent higher after rising 8 per cent in early trading.
The steep early jump also lasted only an hour, before falling back to a 3.23 per cent rise, and even touching negative territory before finally closing up 89 points at 3,775.91.
The Shenzhen Component Index, which is made up of small and medium-sized companies, closed down 1.39 per cent at 12,075.77.
The Chinese markets had been some of the best-performing in the world in recent years, hitting a seven-year peak last month. Shanghai rose more than 150 per cent in just 12 months.
But in the past three weeks the Shanghai and Shenzhen markets have plunged 29 per cent and 32 per cent, respectively, as an unwinding of debt positions wiped £1.8 trillion off market values over the period.
Previous efforts by the Chinese government to keep the country’s share prices from falling, including interest rate cuts and threats to investigate short-sellers, have been largely unsuccessful.Reuse content