Categories: Asia NewsBusiness

China Stock Market Closes down by More than 5%

China stock market closed down by more than 5% after several major brokerage companies announced they were under investigation.

The Shanghai Composite index ended the day 5.5% lower at 3,436.3 points – marking its biggest drop since August.

On November 26, it was announced that China’s securities regulator was investigating the country’s largest brokerage, CITIC Securities.

CITIC Securities is being probed over the possible breaking of market rules.

Rival brokerage Guosen Securities is also being investigated, and shares in both CITIC and Guosen fell by 10%, the maximum allowed in one day.

In addition, trading in China Haitong Securities shares was halted and later in the day the company also confirmed it was under investigation.

Chen Xingyu, an analyst at Phillip Securities, told the AFP news agency: “The biggest reason for such a sudden drop today is because of regulator’s investigation of the top brokers. It has triggered a broader sell-off.”

Analysts said there was little information on the specific reasons for the probes other than violations of securities regulations.

Reuters reported that the Chinese regulator was urging brokerages to stop financing investors’ stock purchases through swaps in an attempt to curb leveraged trading.

A crackdown on leveraged and margin trading has been underway since the Chinese market’s dramatic plunge over the summer.

Market sentiment was already wavering ahead of a new batch of initial public offerings set to make their debut next week.

More negative economic data on the Chinese economy also did little to boost investors’ confidence, with government figures showing that industrial profits in October fell 4.6% from a year ago.

The fifth consecutive decline in profits earned by Chinese industrial companies added more fuel to concerns over a slowdown in the world’s second-largest economy.

Clyde K. Valle

Clyde is a business graduate interested in writing about latest news in politics and business. He enjoys writing and is about to publish his first book. He’s a pet lover and likes to spend time with family. When the time allows he likes to go fishing waiting for the muse to come.

Recent Posts

Spain: At Least 158 Killed In The Country’s Worst Flooding Disaster

At least 158 people have died in Spain's worst flooding disaster in generations. On October…

2 days ago

Russia Fines Google $20,000,000,000,000,000,000,000,000,000,000,000, Surpassing Global GDP

Google has been fined two undecillion (a two followed by 36 zeroes) roubles by a…

2 days ago

Financing Your Home Remodel: 7 Tips for Success

Embarking on a home remodel is an exciting journey, promising enhanced comfort, increased property value,…

2 weeks ago

Donald Trump Serves Up McDonald’s Fries While Kamala Harris Celebrates 60th Birthday with Church Choir

The US presidential candidates continued to campaign across key swing states on October 20. Footage…

2 weeks ago

America PAC: Elon Musk Promises to Award $1M Each Day to Swing States Voters

Elon Musk has said he will give away $1 million a day to a registered…

2 weeks ago

Canada Expels 6 Indian Diplomats Amid Khalistan Row

India and Canada have decided to expel their top envoys along with other diplomats as…

3 weeks ago