“Only the “national team”… would be able to turn the tide like this”, said Yingda Securities analyst Li Daxiao, referring to entities acting for the government.
Chinese shares nose dived on Tuesday with the benchmark Shanghai composite index dropping 6.15 percent to close at 3,748.16 points. France’s CAC-40 fell 1.2 percent to 4,910.04, while Germany’s DAX dropped 1.5 percent to 10,753.30.
Shanghai/Beijing: Chinese stock markets tumbled for a second straight day on Wednesday as investors crowded the exits, fearing a government campaign to prop up share prices was faltering and unnerved by a steady stream of gloomy economic news. China’s main Shanghai stock index slumped more than 4 percent on Wednesday, leading Asian stock markets lower a day after a sharp fall rattled investors around the world.
Shanghai’s main stock index had seen more big falls overnight, adding to jitters over the country, which have also been stirred after last week’s devaluation of the yuan.
Wall Street shares also retreated, with the S&P 500 .SPX sliding 0.26 percent, pressured by weak earnings from retail giant Wal-Mart (WMT.N). Japan’s trade deficit broadened from ¥69.0 billion in June to ¥268.1 billion last month, provisional data from the Ministry of Finance revealed on Wednesday, coming in much larger than the forecast deficit of ¥53.0 billion.
And as the world’s second-largest economy, China’s stock market crash is now weighing on global markets.
Ripples were also felt in other emerging currencies following China’s surprise move to weaken the yuan last week.
The focus should shift to the path of U.S. interest rates later in the day.
China stocks witnessed wild swings on Wednesday following a 6 per cent plunge in the previous session, as experts warned that it wouldn’t be an easy return to good times for the market. “People are anxious about the effect of higher rates on stock markets, at the time when they’ve switched from talking about expanding to global growth to a contraction”, said Mr. Chillingworth at Rathbone Brothers.
Losses in Hong Kong were milder, with the Hang Seng index off 0.1 percent at 23,795.11 and the Hong Kong China Enterprises Index edging down 0.2 percent to 10,944.25.
The Shanghai Composite Index .SSEC closed down 6.1 percent on Tuesday in its biggest daily decline since July 27, denting hopes that Chinese share markets are starting to stabilise after Beijing’s efforts since last month to stem their rout.
The Federal Reserve will release minutes from its latest policy meeting at 2 p.m. EDT, possibly offering clues about the likelihood of an increase in rates at the central bank’s September meeting.
Gold was at $1,117.65 compared to $1,119.83 late Tuesday. The contract closed up 75 cents at $42.62 Monday. Brent crude, a benchmark for worldwide oils used by many U.S. refineries, rose 4 cents to $48.85 per barrel. The yen was at ¥ 124.21 to the dollar.