Chinese shares tumbled more than 8 percent today as an unprecedented government rescue plan to prop up valuations abruptly ran out of steam, throwing the viability of Beijing’s efforts to stave off a deeper crash into doubt.
Major indexes suffered their largest one-day drop since 2007, shattering three weeks of relative calm in China’s volatile stock markets since Beijing unleashed a barrage of support measures to arrest a slump that had started in mid-June.
«The lesson from China’s last equity bubble is that, once sentiment has soured, policy interventions aimed at shoring up prices have only a short-lived effect,» wrote Capital Economics analysts in a research note reacting to the slide.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen plunged 8.6 percent, to 3,818.73 points, while the Shanghai Composite Index lost 8.5 percent, to 3,725.56 points.
China’s market gyrations have stoked fears among global investors about the broader health of the world’s second biggest economy, hitting prices of growth-sensitive commodities such as copper, which fell today to not far from a six-year low.
Source: Buenos Aires Herald