In the wake of Monday’s massive stock market rout, Beijing has reverted to old ways in an attempt to support frayed investor sentiment – verbal intervention.
Speaking through state-run newspaper Xinhua overnight, Zhang Xiaojun, spokesperson with the China Securities Regulatory Commission (CSRC), said the China Securities Finance Corporation would “continue to buy stocks to stabilize the market”.
“CSRC is investigating huge stock sell-offs by some individuals and will punish any malicious short selling”, he added.
The mention of “malicious” short selling is an old favourite making another timely appearance.
Yesterday the benchmark Shanghai Composite index was trashed, dropping 8.48%. Not only was the decline the sixth-largest in percentage terms over the past two decades but also the second-largest points fall in the history of the index.
If that is what the CRSC deems to be stabilising the market, one can only imagine what would occur had they not been already been intervening.
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