The Shanghai Composite Index capped its steepest three-week decline since 1992 as measures to shore up Chinese equities failed to stop margin traders from unwinding positions at a record pace.
The benchmark equity measure fell 5.8 percent to 3,686.92 at the close, after losing as much as 7.2 percent and rising 0.4 percent. Chinese shares have erased more than $ 2.8 trillion of value in three weeks, marking an abrupt end to the longest bull market in the nation’s history.
Executives of at least 28 companies on the ChiNext index of smaller firms said Friday they would take measures such as buying equities or halting new share sales to support prices, after regulators pledged to investigate market manipulation. Steps to boost equities have so far been overshadowed by concern that leveraged traders will keep liquidating bullish bets after equity valuations exceeded levels during the country’s stock-market bubble in 2007.
PT BEST PROFIT FUTURES – China’s stock-index futures retreated after the benchmark gauge had its longest winning streak since 1992.
Futures on the CSI 300 Index expiring in April, the most active contract, lost 0.3 percent to 3,961.40 as of 9:16 a.m. local time. Agricultural Bank of China Ltd. may move after posting an unexpected decline in fourth-quarter earnings. China Life Insurance Co., the nation’s biggest insurer, may advance after saying profit rose 30 percent last year.
The Shanghai Composite Index climbed 0.1 percent to 3,691.41 for a 10th day of gains on Tuesday. The winning streak was the longest since a 14-day stretch in May 1992. The CSI 300 Index rose less than 0.1 percent. Combined turnover in Shanghai and Shenzhen stock exchanges jumped to an all-time high on Tuesday, while new account openings surged to a record 1.14 million last week.
Hong Kong’s Hang Seng China Enterprises Index fell 1.4 percent, while the Hang Seng Index lost 0.4 percent. The Bloomberg China-US Equity Index, the measure of the most-traded U.S.-listed Chinese companies, added 0.2 percent for a seventh day of gains in New York on Tuesday.
The Shanghai Composite has gained 14 percent this year, extending last year’s 53 percent advance, amid speculation the government will add to two cuts in interest rates and one reduction in lenders’ reserve-requirement ratios since November to shore up growth.
PT BESTPROFIT FUTURES