Beijing (AsiaNews/Agencies) – Shanghai stocks plunged by more than 6 per cent at the close on Friday as the country’s key benchmark posted its worst three-week decline since 1992.
Share prices lost 28.6 per cent, to 3,886 points down from 5,166 three weeks ago.
The collapse worries Chinese authorities. Even though the stock market is 80 per cent larger on annual basis, the rout wiped out US$ 2.4 trillion in value, down to US$ 7.3 trillion capitalisation.
In an effort to revive the stock market, the People's Bank of China (PBOC) reduced deposit rates by 25 basis points, whilst the financial authorities have lowered fees for stock trading.
Under new rules announced by the China Securities Regulatory Commission, the list of assets as collateral for Chinese traders has been extended to include real estate, unlisted shares and more.
The decision is designed to tell the market that is still worthwhile to invest in the stock market, or at least, not to sell. However, traders are very sceptical about real estate as collateral for buying shares.