New | Shanghai on edge as stocks extend sell-off
Fears raised mainland bull run may be over as market swings 10 per cent to end lower despite calming words on risks from margin financing
China's volatile stock market came under renewed pressure on Monday as a fresh dose of monetary easing and calming words from the state-backed provider of margin financing failed to buoy investor sentiment.
The Shanghai Composite Index fell 3.34 per cent to close at 4,053.03 points, the lowest in nearly three months. The key index see-sawed throughout the day, with a swing of 10 per cent between the day's peak and trough - the biggest one-day movement on record.
It fell up to 7.5 per cent at one stage in the afternoon following Friday's drop of 7.4 per cent.
The index recovered some ground at the close on buying in large-cap banking and insurance stocks on speculation that state-owned investor Central Huijin would support the market to keep the index above the psychologically important 4,000-point mark.
The market also took heart from a statement by China Securities Finance Corp, the state-backed provider of margin financing loan services, that margin trade accounted for only a small portion of the overall market turnover and that overall risks were manageable. That sparked a short rally before the market lapsed back into decline.
