China stocks hammered as market crash continues

Beijing, July-8  China stocks plunged again on Wednesday, even as regulators worked to contain a crisis that has wiped trillions of dollars off the country's stock markets.

The Shanghai Composite plunged 8% at the market open on Wednesday, before recovering to trade 4% lower by mid-day. The vast majority of stocks listed on the benchmark index were down by 10%, the maximum limit stocks are allowed to fall before being halted. The smaller Shenzhen Composite was off by 3%.

"At the moment there is a mood of panic in the market and a large increase in irrational dumping of shares, causing a strain of liquidity in the stock market," China Securities Regulatory Commission said in statement.

Since June 12, the Shanghai Composite has lost an unnerving 32%. The Shenzhen market, which has more tech companies and is often compared to America's Nasdaq index, is down 41% over the same period.

The government is now doing everything it can to rescue the markets. The People's Bank of China has cut interest rates to a record low, brokerages have committed to buy billions worth of stocks, and regulators have announced a de-facto suspension of new IPOs.

The CSRC said Wednesday that it was actively working to relieve a liquidity crunch in the market.

But investors clearly aren't convinced by government efforts. China's stock market has been undergoing wild swings, sometimes opening with a spike of as much as 7%, before ending the day down by that much.

At least 1,430 of the 2,776 companies traded in China have elected to pull their shares as markets continue their crazy roller-coaster ride, according to state media. The number keeps ticking upward  on Wednesday morning alone, hundreds of firms announced a halt in trading.

Source: BBC