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China shares continue to slide after massive sell-off | |
(about 5 hours later) | |
Shares in mainland China continued their slide on Tuesday, following a massive sell-off the previous day. | |
The Shanghai Composite fell a further 1.3% to 3,676.97, having sunk 8.5% on Monday - its biggest drop in eight years. | |
China has tried to calm investors by reassuring it will 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 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 People's Bank of China also insisted that the country's main economic indicators were steadily improving. |
However, the dramatic drop on Monday had followed weak economic data on profits at Chinese industrial firms, and a disappointing survey of the manufacturing sector on Friday. | |
'Malicious trading' | |
The regulating authority, the China Securities Finance Corporation (CSFC), said there would be a crackdown on short selling. | |
It warned that, "any malicious trading will be investigated and severely punished". | |
But analysts are hesitant to take much confidence from those measures. | 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". | 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." | "The mountain of leverage and the risks of margin calls are hitting market stability." |
In Hong Kong, the Hang Seng index went against the trend set on the mainland, rising 1.3% to 24,663.44. | |
Mers outbreak 'over' | Mers outbreak 'over' |
Elsewhere in Asia, stocks traded mixed, managing to withstand the downward pull from China. | |
Asia's largest stock market, Japan's Nikkei 225 finished unchanged at 20,328.89 points, recovering from losses seen earlier in the day. | |
Shares in camera maker Canon rose 0.5%. The increase came as a surprise after the firm cut its earnings outlook and reported a 16% fall in quarterly profit on Monday. | |
Sales have been hit by consumers increasingly using their smartphones rather than compact cameras. | |
In South Korea, the benchmark Kospi also ended flat at 2,039.08. | |
Relief for stocks came from Prime Minister Hwang Kyo-Ahn declaring the end of the deadly outbreak of Middle East Respiratory Syndrome (Mers). | |
Thirty six 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 quarantine of the last suspected patient was lifted on Monday. | |
Australia's ASX 200 share index closed down 0.2% at 5,580.50. | |
China is Australia's main market and the dramatic volatility in Chinese stocks as well as the slowing growth indicators are expected to affect investors' confidence. | |