China's stocks got smashed again
REUTERSA man reading information displayed at a brokerage house in Shanghai in 2010.
China's stock market sell-off accelerated in late trading on Friday as news that the regulator's investigation into securities firms shook traders' confidence. The composite index in Shanghai is down 5.48% to 3,436.3.
Earlier in the day stocks were already under pressure after the release of Chinese industrial profits, which fell 4.6% over the past 12 months, a sharp acceleration in the decline after last month's 0.1% fall.
Selling really accelerated in post-lunch trade after both Reuters and Bloomberg reported the regulator was investigating numerous securities firms.
Quoting sources, Reuters said China Haitong Securities was under investigation by the regulator of "alleged violations of security regulations."
Separately Bloomberg said both Citic Securities and Guosen Securities had fallen by more than 7% on the market "after saying they were under investigation for alleged rule violations."
Earlier this week we reported that the chairman of Citic Securities had been ousted because he failed to stop insider trading.
Zhang Haidong, chief strategist at Jinkuang Investment Management in Shanghai, told Bloomberg:
The regulator will probably further step up oversight and crack down that area. In the short term, the market will be pressured by that.
That pressure has already hurt stocks in Asia on Friday and could affect European and US markets as well.
Here's the latest daily chart of the Shanghai Composite Index:
Investing.com
Read the original article on Business Insider Australia. Copyright 2015.
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