China’s Shanghai Composite drops more than 5%

The blue-chip CSI300 index slumped 5.4 per cent, to 3,556.99 points, while the Shanghai Composite Index plunged 5.5 per cent to 3,436.30 at close after falling as much as 6.1 per cent in the afternoon session.

The confirmation of the probe into Guosen Securities came a day after the country’s largest broker, Citic Securities, said it was being investigated, following inquiries into several of its executives for insider trading.

C hina’s two top stock market indices plunged on Friday amid a deepening investigation into brokerage corruption by securities regulators and a sell-off in big industrial firms after their profits for the first 10 months of 2015 dropped.

Meanwhile, the country’s biggest brokerage Citic Securities said Thursday it was being probed for suspected “rule violations” as officials crack down on financial firms in the wake of the summer sell-off.

On Wednesday, the Securities Association of China – an industry body that operates under government supervision – said that Citic had overstated the value of some of its derivatives by more than 1 trillion yuan ($157 billion).

Meanwhile, Hong Kong’s Hang Seng lost 1.87%, extending its weekly losses to 2.8%.

Mainland stocks fell across the board, with the industrial sector and brokerage stocks among the worst casualties. China’s shares entered a bull market, defined as a rise of 20% from a recent low, earlier this month.

After the stock market slump this summer, Beijing launched a massive and unprecedented rescue effort and began cracking down on insider trading and short-selling, which it said were partly to blame for volatility.

China Haitong Securities is under investigation by the China Securities Regulatory Commission (CSRC), two people with direct knowledge of the matter told Reuters, following similar probes into two other domestic brokers.

“Investors have concerns about who will be the next [brokerage]” targeted by authorities said Wong Chi-man, head of research at China Galaxy International Securities.

Haitong Securities Co., one of China’s biggest brokerages, suspended trading in Hong Kong and Shanghai on Friday, saying that an announcement was pending.

France’s CAC 40 slipped 0.5 percent to 4,921.22 and Germany’s DAX edged down 0.1 percent to 11,309.69.

BLACK FRIDAY: The main focus on Wall Street’s return will likely center on retail stocks because of Black Friday, when millions of Americans venture to shops the day after Thanksgiving in search of bargains.