China stocks hit four-month lows on panic selling
SHANGHAI, July 8 (Reuters) - China stocks tumbled to four-month lows on Wednesday as panicky investors dumped shares across the board, even as the government tried to unveil supportive measures throughout the day session to stop the plunge.
To insulate themselves from the meltdown, more than 500 China-listed firms announced trading halts before the market opened, bringing the total number to around 1,300, almost half of China's roughly 2,800 listed firms.
"I've never seen this kind of slump before. I don't think anyone has," said Du Changchun, analyst at Northeast Securities.
"Liquidity is totally depleted."
The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 6.8 percent, to 3,663.04, while the Shanghai Composite Index lost 5.9 percent, to 3,507.19 points.
In an unprecedented sign of desperation, all of China's three futures index products for July delivery slumped by their 10 percent daily limit, meaning investors are extremely bearish on all type of stocks - small, mid, and big cap.
Most blue chips, the target of government's intensified purchases, saw previous session's gains wiped out. Some analysts attributed the sell-off to share suspensions by a huge number of companies.
"Given the suspension of stocks comprising a large part of the onshore markets, there are fewer stocks available to sell for those investors needing to meet their margin call requirements," said John Ford, chief investment officer for Asia Pacific at Fidelity Worldwide Investment.
"This ...is in large part responsible for the current liquidity squeeze." Continuación...