(Bloomberg) — China promised to stabilize markets after chaotic trading on Friday sent stocks to their lowest in five years, but policymakers wiped out more than $6 trillion in value. , did not specify how it plans to end the decline in stock prices that has undermined confidence in China. The world's second largest economy.
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The China Securities Regulatory Commission said on Sunday it would guide more medium- and long-term funds into the market, crack down on illegal activities such as malicious short selling and insider trading, and vowed to prevent abnormal volatility.
The short statement came as the benchmark CSI 300 index plunged as much as 3.4% on Friday and an outpouring of frustration from retail investors on social media days before families across the country gathered to celebrate the Lunar New Year. It was something I received.
Authorities have taken gradual steps to support the economy and markets in recent months, and are discussing the possibility of a stock price stabilization fund, but have yet to announce any major measures to stem the decline in stock prices. Not yet. Weak economic indicators, rising geopolitical tensions with the United States, a worsening real estate crisis and an unclear crackdown on the financial sector are weighing on investor sentiment.
The CSI300 index fell 6.3% in January, marking the sixth consecutive month of decline. Stocks briefly rose toward the end of the month after Bloomberg reported that authorities were aiming to mobilize about 2 trillion yuan ($278 billion) into a stabilization fund, but the market has since fallen again, the most since January 2019. A low price was reached.
Over the weekend, the daily 21st Century Business Herald quoted Liu Yuhui of the Chinese Academy of Sciences as saying that authorities should establish a stabilization fund as soon as possible to boost market confidence, and that its size should exceed 10 trillion yuan. It was reported that they are aiming to do so. Social science, government think tank.
In a sign of how angry some investors are, thousands of people flooded the social media accounts of the US embassy in Beijing to air their frustrations over the weak economy and stock prices.
By Saturday night, about 53,000 users had added comments to the comments section of the embassy's Weibo post about giraffe conservation on Friday night, and it had received more than 300,000 likes. Chinese internet users often struggle to find an outlet to air their grievances about the economy and government's performance, and official accounts of Chinese state institutions and media typically disable commenting or only provide selective feedback. Either display.
Friday's Weibo post by the CSRC did not show any comments about the State Council meeting on improving the business environment.
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