THE “national team” was supposed to save China’s stockmarket. Investors were coming round to the view that the government had succeeded in stabilising share prices after the central bank had pumped billions of yuan into the market in recent weeks. Stocks were slowly clawing back territory lost in their sharp tumble of the previous month. But on Monday the Shanghai Composite, the country's main index, fell 8.5%, its biggest one-day fall since early 2007.
As with any sudden sell-off, the reasons given by analysts were varied and more akin to guesses than solid explanations. Many pointed to a call by the International Monetary Fund, reported by Bloomberg, a media outlet, for the government to wind down its extraordinary measures to prop up the market. Some said regulators had quietly resumed a crackdown on unofficial margin lending used to buy shares. Others pointed to a drop in industrial profits in newly published data, a...Continue reading
Source :Business and finance http://ift.tt/1D22ipc
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