The Huffington Post: Panic Grips Chinese Market As Stocks Nosedive

He said in a statement: “Irrational sell-offs have increased greatly and that has led to a liquidity tension in the stock market”.

Losses on the mainland also weighed heavily on Hong Kong shares, with the Hang Seng Index down 3.3 percent and shares of Chinese companies listed in the city falling 4.2 percent.

Asian bourses, already under pressure from the protracted Greek debt crisis, also posted sharp declines as contagion from the rout in China spread, with investors running for safe-haven assets such as the yen.

But the measures still have failed to revive confidence among stock investors.

CSRC spokesman Deng Ge said state-owned margin financing body China Securities Finance (CSF) would “continue to stabilize the share prices of blue chips, while increasing its buying of small and medium sized company stocks in a bid to calm the nervous market situation”.

China stock futures pointed to further losses. Indian stocks retreated 1.3 percent, while equity indexes in South Korea, Vietnam and the Philippines lost at least 1.1 percent.

Now Haitong’s attention is squarely on domestic matters, as its share price has tumbled about 35% since end-June.

The securities regulator said the Securities Finance Corp had provided 260 billion yuan ($41.8 billion) to 21 brokerages.

A huge amount of money has been put into Chinese stock markets over the past year or so by regular Chinese people, something the government has encouraged.

Trading on more than three-quarters of China’s stock market was motionless for much of Wednesday’s session, as authorities took further steps to stem a massive equities sell-off.

Over the weekend, Beijing suspended initial public offerings and made it easier for investors to borrow to buy stocks.

“Ethanolamines demand in China is very poor as with the economy [in a] downturn”.

But today’s plunge in China, following yesterday’s sell-off, reinforces doubts about the effectiveness of Beijing’s rescue efforts.

The central bank said it will provide “ample liquidity to support stock market stability” through a state-owned company that lends to brokerages to finance share purchases, a practice known as margin lending.

“They [regulators] are doing everything now, barring the central bank buying shares, and you could even make an argument that they are doing that by backdoor”, said Michael Every, head of financial markets research at Rabobank. Chinese policy makers’ latest attempts to stop the selling, including measures to prop up small-cap stocks, were overshadowed by data showing an unprecedented liquidation of margin trades on Tuesday.

“When the stockmarket was booming, the PBOC was wary of cutting interest rates or lowering the RRR”, he said via phone from Hong Kong. Bond prices move inversely to yields.

However, analysts said this had panicked investors to sell off shares in other listed companies, in case they too suspended trading.

The plunge in China’s previously booming stock markets is a major headache for President Xi Jinping, who had hoped to foster a more liberal approach to markets as part of his economic reform agenda.

China is the world’s top copper consumer, accounting for about 40 per cent of global consumption.

The Shanghai Composite sank to a three-month low.

The rouble fell 0.7 percent while the Polish zloty and Hungarian forint touched five-month lows to the euro.