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China: Stocks finish the day higher
[SHANGHAI] China's stocks rose, paring the biggest quarterly loss since 2008, as the government struggled to halt a US$5 trillion rout and the world's second-largest economy showed signs of a sharper slowdown.
The Shanghai Composite Index tumbled 29 per cent since the end of June, the biggest slump among benchmark global gauges. The measure rose 0.5 per cent to 3,052.78 at Wednesday's close on turnover 55 per cent below the 30-day average. Automakers led gains after the government cut a tax on vehicle purchases. China's financial markets will be shut from Thursday for weeklong National Day holidays.
The value of shares traded on mainland bourses plunged 87 per cent from the June record as the equity boom turned to bust and the government took unprecedented measures to shore up stocks - including banning major shareholders from selling and curbing index futures trading. Leveraged wagers, which helped fuel gains in the first half of the year, have tumbled by 60 per cent since the peak, while the government has wiped out nearly 70 per cent of unregulated margin lending. President Xi Jinping said last week equities have entered a phase of "self recovery," signaling policy makers will pare back support as volatility subsides.
"The government's clampdown on non-compliant margin financing has hit the Chinese equity markets hard," said Bernard Aw, a strategist at IG Asia Pte in Singapore. "We however may see some upside potential in the fourth quarter, as much of non- compliant margin trading accounts have been cleared. Further weakness in the Chinese economy may see investors keeping to the sidelines."