China securities regulator asks financial institutions in Hong

One of the most actively traded stocks was Stratech Group, which rose 0.9 cents to 5.6 cents with 109.2 million shares changing hands.

China shares have been reeling since an 8.5% loss on Monday, the biggest daily decline in more than eight years, when investors dashed for the exits on worries that government-backed funds might wind down market support.

The Chinese authorities have launched broad interventions to control a rout after the Shanghai market fell 30 per cent from its peak in the middle of last month, raising questions over pledges of reforms in the world’s second-largest economy.

The China Securities Regulatory Commission (CSRC), in an announcement on its official microblog on Friday, also said it had restricted 24 stock trading accounts for suspected irregularities, including abnormal bids for shares and bid cancellations that might have impacted wider market performance.

Despite the rebound, analysts said relief might be temporary, as the Shanghai market could fall further in volatile trading.

“Investors become especially sensitive towards the weekend when Beijing usually releases new messages, and that’s why they tend to square their positions on Friday”. The data underscored the steady growth that is likely to bolster the Federal Reserve’s case that it will soon be time to raise rates from a record low. “Profits can be manipulated by cutting costs, buying back shares, but your top line is your top line and if you aren’t growing sales, it’s very hard to mask that”.

“The market must generate a wealth effect so that investors can regain confidence”, Tang Yonggang, another analyst at Shenwan Hongyuan Securities, said adding that state-backed funds may be getting diverted to infrastructure and military stocks. The benchmark Kospi average dropped 18.59 points or 0.91 percent to 2,019.03. Expectations of a rate increase in the U.S. also gives incentive to shift to higher yielding assets, as commodities don’t provide any income and cost money to hold.

Gold has sank to five-year lows, and is now trading down 0.6% at $1082 a troy ounce in Asia.

In the commodity space, U.S. crude futures slipped for a second session to trade around $48 a barrel in early Asian trad, as mixed economic data from the U.S. overnight weighed on sentiment, although a weaker dollar put a floor under prices. The company has denied any wrongdoing. Heartland shares climbed 4.4 percent to $1.19 percent, while those of Kathmandu rallied 3 percent to $1.72.

Eleanor Warnock contributed to this article.