Chinese stocks opened down on Tuesday, taking no comfort from a slew of support measures unleashed by Beijing in recent days, and unnerved by Chinese Premier Li Keqiang’s failure to mention the market chaos in a statement on the economy. Before the market opened, Li said in comments on a government website that China had the confidence and ability to deal with challenges faced by its economy, but had nothing to say on the three-week plunge that has knocked around 30 percent off Chinese shares since mid-June.
After a brief pause to the slide on Monday, the CSI300 index .CSI300 of the largest listed companies in Shanghai and Shenzhen fell 4.8 percent in early trading on Tuesday, while the Shanghai Composite Index .SSEC shed 3.4 percent. The ChiNext growth board .CHINEXTC, home to some of China’s giddiest small-cap valuations, fell 5.1 percent.
In an attempt to halt the slide, China has arranged a curb on new share issues and orchestrated brokerages and fund managers to buy massive amounts of stocks, helped by China’s state-backed margin finance company, which in turn has a direct line of liquidity from the central bank. The official Shanghai Securities News reported on Tuesday that China’s major insurance firms plowed tens of billions of yuan into blue-chip exchange-traded funds (ETF) and large caps on Monday.
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