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

Donald Trump and Elon Musk Celebrate Election Victory at UFC 309

Image source: Wikimedia Commons President-elect Donald Trump celebrated his election victory at the Ultimate Fighting…

5 days ago

White House 2024: Donald Trump Wins, Kamala Harris Calls Him to Concede Election

Millions of voters across the US chose to return Donald Trump to the White House…

2 weeks ago

Who Won? Donald Trump Declares Victory as He Addresses Jubilant Supporters in Florida

Donald Trump declares victory in the US election as he addresses jubilant supporters in Florida.…

2 weeks ago

Stocks Soaring as Donald Trump Closes in on US Victory

Stocks around the world are rising as Donald Trump appears to be on the cusp…

2 weeks ago

Who Won? Kamala Harris Cancels Election Night Party as Path to Victory Narrows

Donald Trump has won Pennsylvania, North Carolina and Georgia and taken a lead over Kamala…

2 weeks ago

Quincy Jones Dead at 91

Quincy Jones, the celebrated musician and producer who worked with Michael Jackson, Frank Sinatra, Ray…

2 weeks ago