WRAPUP 3-Chinese stocks tumble again, ignoring Beijing's blandishments
By Pete Sweeney
SHANGHAI, July 2 (Reuters) - China stocks fell sharply again on Thursday, fighting off fresh moves by regulators to restore confidence and raising questions about how much more firepower Beijing can bring to bear before a full-scale panic sets in.
Shanghai's benchmark share index crashed below 4,000 points for the first time since April - a key support level that analysts said had been seen as a line in the sand that Beijing had to defend, below which more conservative investors would start ejecting from their leveraged positions, widening the rout.
Chinese markets, which had risen as much as 110 percent from November to a peak in June, have collapsed at an incredibly rapid pace in since June 12, losing more than 20 percent in jaw-dropping volatility as money surges in and out of the market.
That drop has wiped out nearly $3 trillion in market capitalisation, more than the GDP of Brazil.
In the latest move to arrest the slide, China's securities regulator late on Wednesday relaxed rules on using borrowed money to speculate on stock markets, letting brokerages set their own tolerance level on margin calls and allowing the roll-over of margin lending contracts.
"I think this is the right dose of medicine," said Hong Hao, chief strategist with BOCOM International. "The recent slump was largely driven by margin calls, so if brokerages don't force liquidation ... the market slide should be stemmed, at least for now."
But there was no immediate relief, with the CSI300 index of the largest listed companies in Shanghai and Shenzhen dropping 3.4 percent, while the Shanghai Composite Index lost 3.5 percent, to 3,912.77 points.