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Chinese shares continue to slide Chinese shares continue to slide
(about 1 hour later)
The dramatic sell-off in China's main stock market has continued despite regulators desperate efforts to try to stem the losses.The dramatic sell-off in China's main stock market has continued despite regulators desperate efforts to try to stem the losses.
The Shanghai Composite index plunged 8% on opening, taking the drop in share values to 30% since their June peak.The Shanghai Composite index plunged 8% on opening, taking the drop in share values to 30% since their June peak.
On Wednesday, another 500 listed firms said they would stop trading their shares in an effort to insulate themselves from the meltdown.On Wednesday, another 500 listed firms said they would stop trading their shares in an effort to insulate themselves from the meltdown.
Around 1,300 firms have halted trading, almost half of China's main shares.Around 1,300 firms have halted trading, almost half of China's main shares.
IG chief market strategist Chris Weston dubbed the sell-off "Black Wednesday".IG chief market strategist Chris Weston dubbed the sell-off "Black Wednesday".
"For the first time, The China Insurance Regulatory Commission (CIRC) has admitted there is genuine 'panic selling' underway."For the first time, The China Insurance Regulatory Commission (CIRC) has admitted there is genuine 'panic selling' underway.
"Of course, this is tongue in cheek, but when we see around 90% of the market suspended or falling by their daily limit (while further measures have been taken to limit the influence seemingly exerted by futures traders) you know things are becoming less rational," he said."Of course, this is tongue in cheek, but when we see around 90% of the market suspended or falling by their daily limit (while further measures have been taken to limit the influence seemingly exerted by futures traders) you know things are becoming less rational," he said.
'Market stability''Market stability'
Chinese regulators made a string of pledges on Wednesday to try to ease the "panic sentiment" in the market.Chinese regulators made a string of pledges on Wednesday to try to ease the "panic sentiment" in the market.
The Cabinet agency that oversees China's biggest state-owned companies said it had told them not to sell shares and to buy more "in order to safeguard market stability".The Cabinet agency that oversees China's biggest state-owned companies said it had told them not to sell shares and to buy more "in order to safeguard market stability".
And the CIRC pledged to make more money available to brokerages from its state-backed margin finance firm.And the CIRC pledged to make more money available to brokerages from its state-backed margin finance firm.
Investors in China rely on margin financing from these brokerages to borrow money to buy stocks.Investors in China rely on margin financing from these brokerages to borrow money to buy stocks.
Insurers were also given the go-ahead to invest more in blue chip stocks - with the industry watchdog raising limits from 5% of their total assets up to 10%.Insurers were also given the go-ahead to invest more in blue chip stocks - with the industry watchdog raising limits from 5% of their total assets up to 10%.
Analysis: John Sudworth, BBC Correspondent, ShanghaiAnalysis: John Sudworth, BBC Correspondent, Shanghai
The risk of intervening in an attempt to stop people panicking is that they'll only panic more.The risk of intervening in an attempt to stop people panicking is that they'll only panic more.
The confidence measures are in full swing - new share offerings have been suspended, brokerages have been ordered to buy shares, and the Chinese state has promised to provide sufficient liquidity to keep the markets up.The confidence measures are in full swing - new share offerings have been suspended, brokerages have been ordered to buy shares, and the Chinese state has promised to provide sufficient liquidity to keep the markets up.
But confidence continues to evaporate and hundreds more firms have announced trading halts, taking the total now seeking temporary respite from the storm to more than 40% of the market.But confidence continues to evaporate and hundreds more firms have announced trading halts, taking the total now seeking temporary respite from the storm to more than 40% of the market.
The government appears to be motivated by the fear of a knock-on effect on the real economy as stock market losses hit consumer spending.The government appears to be motivated by the fear of a knock-on effect on the real economy as stock market losses hit consumer spending.
But some analysts wonder why it is staking its authority on an attempt to shore up a market that - despite recent sharp losses - is still well up on where it was a year ago.But some analysts wonder why it is staking its authority on an attempt to shore up a market that - despite recent sharp losses - is still well up on where it was a year ago.
The official intervention did little to reassure investors.The official intervention did little to reassure investors.
The Shanghai Composite was down 6.1% at 3,582.50 by early afternoon. And Hong Kong's Hang Seng index was down 4.2% at 23,926.09, mirroring falls on China's mainland. The Shanghai Composite closed down 5.9% at 3,507.19, having fallen as much as 8.2% during the session. And Hong Kong's Hang Seng index tumbled 7.3% to 23,139 mirroring falls on China's mainland.
Markets in the rest of Asia were also lower, with Japan's Nikkei 225 index down 2.24% to 19,919.89.Markets in the rest of Asia were also lower, with Japan's Nikkei 225 index down 2.24% to 19,919.89.
In Australia, shares fell as the price of iron ore - one of its biggest exports - fell almost 6% to a three month low.In Australia, shares fell as the price of iron ore - one of its biggest exports - fell almost 6% to a three month low.
The benchmark S&P/ASX 200 index was down 1.78% at 5,482.20.The benchmark S&P/ASX 200 index was down 1.78% at 5,482.20.
And South Korea's Kospi index was lower by 1.04% to 2,019.04 as investors looked forward to the central bank's decision on interest rates on Thursday.And South Korea's Kospi index was lower by 1.04% to 2,019.04 as investors looked forward to the central bank's decision on interest rates on Thursday.