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CHINESE stock markets bounced back yesterday after authorities acted to halt a four-week shares slump.
The Shanghai Composite Index leaped up 5.76 per cent, its biggest daily rise for six years.
The Shenzhen Component Index rose by 4.25 per cent and the ChiNext index of growth enterprises by 3 per cent.
State companies and directors have been instructed to buy shares, and the China Securities Regulatory Commission ordered investors owning more than a 5 per cent stake in a firm not to sell their holdings for the next six months.
The Shanghai Index had fallen by more than 30 per cent since a boom peaked on June 12, amid worries that share prices were inflated.
But yesterday police joined a securities regulator investigation into “malicious short selling.”
Short selling — “shorting” — involves selling borrowed stocks and shares to provoke a run on the market, then buying them back at the resulting lower price.
