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China shares continue to slide after historic sell-off | |
(about 2 hours later) | |
Shares in mainland China continued their slide on Tuesday, after a historic sell-off the previous day. | |
The Shanghai Composite fell by 4.3% to 3,567.38 points in early trade, after the index on Monday saw its biggest drop in eight years with an 8% tumble. | |
China has tried to calm investors by reassuring it would implement prudent monetary policy to stabilise markets. | |
The country's central bank said it would inject 50bn yuan (£5.2bn; $8.05bn) into the money markets. | |
The People's Bank of China also insisted that the country's main economic indicators were steadily improving. | |
The dramatic drop on Monday, though, had followed weak economic data on profit at Chinese industrial firms and a disappointing private factory sector survey on Friday. | |
Crackdown on 'malicious trading' | |
The regulating authority China Securities Finance Corporation (CSFC) also said there would be a crackdown on short selling. | |
"Any malicious trading will be investigated and severely punished," the CSFC warned in a statement. | |
But analysts are hesitant to take much confidence from those measures. | |
Evan Lucas, market strategist with trading firm IG said in a note that "clearly the Chinese markets are unable to support themselves". | |
"The mountain of leverage and the risks of margin calls are hitting market stability." | |
In Hong Kong's, the Hang Seng index followed the mainland's lead and was down by 0.5% to 24,229.47 points in early trade. | |
Mers outbreak 'over' | Mers outbreak 'over' |
Elsewhere in Asia, stock took the cue from the poor performance on the Chinese mainland and also traded in negative territory. | |
Asia's largest stock market, Japan's Nikkei 225 was 1.1% down to 20,123.70 points. | |
Shares in camera maker Canon were up 0.8%. The rise comes as a surprise after the firm cut its earnings outlook and reported a 16% fall in quarterly profit on Monday. | |
Sales are hit by consumers increasingly using their smartphones rather than compact cameras. | |
In South Korea, the benchmark Kospi fell 0.9% to 2,019.92 points. | |
Relief for stocks could come from Prime Minister Hwang Kyo-Ahn declaring the end of the deadly outbreak of Middle East Respiratory Syndrome (Mers). | Relief for stocks could come from Prime Minister Hwang Kyo-Ahn declaring the end of the deadly outbreak of Middle East Respiratory Syndrome (Mers). |
36 people died out of the 186 infected by the virus, following the first diagnosis on 20 May. | 36 people died out of the 186 infected by the virus, following the first diagnosis on 20 May. |
The outbreak had been a major strain on the country's economy, affecting domestic consumption and tourism. | The outbreak had been a major strain on the country's economy, affecting domestic consumption and tourism. |
The quarantine of the last suspected patient was lifted on Monday. | The quarantine of the last suspected patient was lifted on Monday. |
Australian stocks followed the region's trend, falling 0.9% to 5,542.20 points. | |
China is Australia's main market and the dramatic volatility in Chinese stocks as well as the slowing growth indicators are likely dampening investor sentiment. | China is Australia's main market and the dramatic volatility in Chinese stocks as well as the slowing growth indicators are likely dampening investor sentiment. |