China stocks plunge most in three months on broker probe, growth fears
Broader investigation into brokerage sector and ongoing bearish economic news spark biggest sell-off in mainland shares since late August
Mainland stocks suffered their worst sell-off since late August on Friday, as investors dumped equities on fears about Beijing’s crackdown on stock speculation and further signs of economic slowdown.
Sentiment was battered by a barrage of bearish news, including a widening probe of the brokerage sector by regulators, a big drop in industrial profits, and the weakest yuan mid-point fix in about three months.
The Shanghai Composite Index sank 5.5 per cent, the steepest percentage decline since August 25, wiping out all the gains for the index since early this month.
The large-cap CSI300 slid 5.4 per cent, the tech-heavy Shenzhen Composite Index plummeted 6.1 per cent, and the ChiNext Index skidded 6.5 per cent.
In Hong Kong, the Hang Seng Index declined 1.9 per cent, resulting in a loss of 3 per cent for the week, while the Hang Seng China Enterprises Index fell 2.5 per cent on Friday.
A slump in the brokerage sector led the broad sell-off in markets, amid news that Beijing is widening a probe and intensifying its crackdown on speculative trading.
The ongoing curbs on margin financing are taking a toll on the A-share market
