Shanghai market plunges on margin trade curbs for 3 brokers Chinas benchmark share index plunged as much as 6 percent Monday following news that the securities regulator was imposing curbs on margin trading on several major brokerages. By late morning, Shanghai Composite Index had unwound some of its losses and was down 4.9 percent at 3,210.00. The China Securities Regulatory Commission said late Friday that it was imposing the curbs on margin financing, or borrowing to purchase stocks, following an investigation of the industry. The Shanghai Composite has surged almost 60 percent in the past year. The three brokerages, Citic Securities Co., Haitong Securities Co. and brokerage Guotai Junan, were forbidden to lend money and shares to new customers for three months after they allegedly were caught extending margin trading contracts in violation of the rules. Trading in Citic and Haitongs shares was suspended on the Shanghai exchange after they fell by the 10 percent limit. Guotai Junan International Holdings shares on the Hong Kong Stock Exchange fell 10 percent but regained some lost ground, trading 6.1 percent lower by late morning. Elsewhere in Asia, shares were mostly higher. Hong Kongs Hang Seng fell 0.9 percent to 23,895.35 while Japans Nikkei 225 stock index rose 0.6 percent to 16,957.86. Markets also rose in South Korea, Taiwan and Australia.
Posted on: Mon, 19 Jan 2015 03:47:10 +0000
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