China: Stocks plunge again as regulators hunt for bull market killer

[SHANGHAI] China stocks slumped again on Friday, taking their three-week tumble to nearly 30 per cent and wiping out most of this year's gains.

Friday's tumbles came after news that regulators said they have launched investigations into suspected market manipulation.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 5.4 per cent on Friday, to 3,885.92, while the Shanghai Composite Index lost 5.8 per cent, to 3,686.92 points.

For the week, CSI300 fell 10.4 per cent and SSEC lost 12.1 per cent. Two weeks earlier, the indexes also had double-digit falls.

On Friday, comments from the central bank and Premier Li Keqiang the day before did little to calm panicky investors. The central bank vowed to guard against systemic financial risks, while Li called for a stable and healthy capital market.

The remarks were quickly overshadowed by a statement from the China Securities Regulatory Commission (CSRC) early on Friday it had set up a team to look at "clues of illegal manipulation across markets."

Signalling the start of the hunt for someone to blame, the China Financial Futures Exchange (CFFEX) suspended 19 accounts from short-selling for one month, sources with direct knowledge said on Friday.

REUTERS