China Stocks Extend Selloff as Regulator Opens Investigation

The bloodbath in Chinese equities has extended into Friday, with the benchmark Shanghai Composite plunging as much as 7 percent amid reports that the securities market regulator has launched a probe into suspected market manipulation.

The China Securities Regulatory Commission (CSRC) had set up a team to look at “clues of illegal manipulation across markets”, spokesman Zhang Xiaojun said in comments on the CSRC’s official Weibo microblog late on Thursday.

“Cases that meet legal standards will be immediately investigated, seriously cracked down upon according to law, and those suspected of a crime will be resolutely transferred to the police for investigation,” he said. Meanwhile, the China Financial Futures Exchange has suspended 19 accounts in the past month for short-selling, sources told Reuters.