China crashes to new low as investors panic

CHINA’S rattled stock market crashed to a four-month low yesterday as panicky investors dumped shares across Asia.

The Shanghai Composite Index fell 5.9pc – taking losses in the past 17 days of trading to 32pc – while the Hang Seng was down 5.8pc in Hong Kong and the nikkei was off 3.1pc in Tokyo.

Around half of companies listed in China have now suspended trading in their shares in a desperate effort to protect themselves from the carnage.

‘I’ve never seen this kind of slump before. I don’t think anyone has,’ said Du Changchun, an analyst at northeast Securities. ‘Liquidity is totally depleted.’

Deng Ge, a spokesman for the China Securities Regulatory Commission, warned of ‘panic’ in the markets as Beijing’s efforts to prop up sentiment fell on deaf ears.

‘The stock markets now are full of panic and the amount of irrational selling has been increasing,’ he said.

It is feared the bloodbath on the stock market will take its toll on the Chinese economy – and in turn the rest of the world – as consumer and business confidence drains away. Commodity prices have tumbled in recent trading and were down again yesterday with metals including gold, silver, copper and platinum on the slide.

Oil was also down again, with Brent crude falling below $56 a barrel having been trading at nearly $70 in May.

The People’s Bank of China said it was working ‘to maintain the stability of the stock market’ in part by providing money that investors could borrow to plough back into shares. But critics said Beijing’s failure to get to grips with the situation risks undermining confidence further.

‘At this moment, it appears as if they’ve lost control of it,’ said Warren Gilman, the chairman of Hong Kong-based CEF Holdings, the flagship company of Li Kashing, Asia’s richest man. ‘I don’t have a clue what’s going on. And I don’t know if anyone does, including anyone in Beijing.’