Beijing’s measures fail to stem stock market tumble

China stocks took another plunge Wednesday, as the securities regulator warned the market was in the grip of “panic” selling after fresh government moves failed to arrest a rout that has now infected regional markets. Confidence took a hit as trading halts expanded to cover more than 1,300 companies – nearly half of mainland listings – to prevent further sharp declines in their stock prices. The latest tumble came despite the government announcing new measures to support the market, including allowing insurance companies to invest more assets in stocks and a programme to buy the shares of smaller companies.

The government’s efforts are useless, at least in the short term. The scary part is that people don’t know where the bottom is.

Mr. Zhang, an account manger for a Beijing-based asset management company

The decline in Chinese stock prices threatens to fuel political tensions and set back Communist Party plans to use financial markets to make China’s state-dominated economy more productive. The party wants to encourage stock ownership, but small investors whose holdings have plunged in value say they will no longer buy shares. In the wake of the stock market slump, at least 1,301 companies have halted trading on mainland Chinese exchanges, locking up $2.6 trillion of shares, or about 40 percent of the market’s capitalisation, Bloomberg News reported. As a measure of how big the slide is compared to Greece’s financial crisis, China’s stock market is losing multiple times the value of Greece’s GDP almost daily.

Business China