China: Stocks open little changed after Monday's plunge

[SHANGHAI] China stocks opened little changed on Tuesday, edging slightly lower after a market slump that followed an official crackdown on credit products that have been blamed as fueling excessive market speculation over the past months.

Market talk that China's regulators intentionally sought to suppress a stock rally by taking actions that led to Monday's sharp drop in share prices "is not consistent with facts" said Deng Ke, spokesman for the China Securities Regulatory Commission (CSRC).

The CSI300 index dropped 0.55 per cent while the Shanghai Composite Index fell 0.06 per cent.

The indices fell 7.7 per cent on Monday, their biggest one-day drop since the global financial crisis, as many financial shares plunged by their 10 per cent daily limit.

China's securities regulator punished industry heavyweights for illegal operations in their margin trading. Banks were hit after the banking regulator issued draft rules to tighten supervision of entrusted loans, a kind of shadow banking product.

REUTERS