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China’s Stock Markets Slumps to Eight-year Lows

The future of China's deeply troubled stock markets went from bad to worse, slumping to fresh eight-year lows. This came as regulators' plans to solve the overhang of non-tradable government-owned shares heightened fears that more losses may lie ahead.
The benchmark Shanghai Composite Index, which covers both A and B shares listed on the Shanghai Stock Exchange, closed at a fresh low on June 3, down 2.43 points, or 0.24 percent, at 1,013.64.
It was the lowest close since February 24, 1997, after three consecutive sessions of losses that saw the composite trim 3.8 percent of its value.
Dealers said they expect the index to fall through the key technical mark of 1,000 points soon, unless Beijing steps in with strong medicine to bolster investor confidence.
"The market has been falling for years and investors are numb," said Zhang Qi, an analyst with Haitong Securities.
"The key is to recover investors' confidence. There is more that the government could do to better support investors in the market."
In April, Beijing tentatively moved to prop up the beleaguered exchanges and halt financial haemorrhaging, but it was a first stitch in a wound that has been festering for years.
The China Securities Regulatory Commission chose four companies under which the non-tradable shares would be listed, and then announced this week it would select 10 more.
But, at both junctures, anxious investors responded with more selling.
"The sentiment was so weak that the index has been falling really fast. Some companies' stocks even lost all of last year's gains in these several sessions," said Zhang.