China stocks continue to fall

Beijing, Sep 7 (IANS) Chinese shares extended their losses on Monday, the first trading day after a four-day holiday to mark the 70th anniversary of the end of World War II.

The benchmark Shanghai Composite Index dipped 2.52 percent to end at 3,080.42 points, despite the assurance provided by the authorities over the weekend that the market would stabilise, Xinhua news agency reported.

The Shenzhen Component Index lost 0.63 percent to close at 9,991.76 points.

The ChiNext Index, which tracks China’s NASDAQ-style board of growth enterprises, gained 2.07 percent to close at 1,893.52 points.

Total turnover on the two stock markets was 602.5 billion yuan ($94.88 billion), down from 748.76 billion yuan on the previous trading day.

Winners outnumbered losers 644 to 250 in Shanghai, and by 1,075 to 293 in Shenzhen. Stocks in the finance sector and airplane manufacturing industry lost the most.

On September 2, the last day of trading, the key Shanghai index settled at 3,160.17 points, declining nearly 40 percent from its June peak and wiping out most of this year’s gains.

To calm jittery investors, China’s securities regulator on Sunday night said the stock market had stabilised and risks had been minimised.

The regulator said it will continue to roll out reform measures, improve the legal framework and enhance market supervision in a bid to prevent more abnormal fluctuations.

Central bank Governor Zhou Xiaochuan also offered reassurance on Saturday, saying corrections are “roughly in place” and a more stable financial market is expected.

He said the market fluctuations have not had any notable impact on the real economy and the fluctuations will not change the government’s resolve to continue with reform.

Chinese Finance Minister Lou Jiwei said the Chinese economy has entered a “new normal” and the economic growth rate is predicted to be around seven percent in the coming four to five years.

“Currently, what the market needs most is confidence, rather than funding. As long as the economic fundamentals and real economy improve, so will the stock market,” said economist Lang Xianping.

China’s statistics authority on Monday lowered the country’s growth rate for 2014 to 7.3 percent from 7.4 percent based on its preliminary verification, suggesting the world’s second-largest economy still faces economic headwinds.

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