Volatility snaps marginal gains on nation's bourses

Stock investors at a brokerage in Jiujiang, Jiangxi province. The Shanghai Composite Index dropped 5.2 percent to 4,053.70 points on Wednesday. [Photo/China Daily]

Uncertainties still remain amid wild fluctuations, say market sources

Share prices plunged on Chinese bourses on Wednesday, after a brief rally on Tuesday, amid heavy volatility despite efforts by the government to prop up the flagging market sentiment.

The benchmark Shanghai Composite Index sunk 5.23 percent to finish at 4,053.70 points on turnover of 838.07 billion yuan ($137.39 billion). The Shenzhen Component Index dropped 4.79 percent to close at 13,650.82 points on turnover of 691.16 billion yuan.

Though investor sentiment continues to be at a low, there has also been speculation that policymakers may consider more measures to shore up the sagging economy, after share prices dropped by more than 20 percent in two weeks.

According to a survey jointly conducted by the Financial Research Center of the Fudan University and two other financial information platforms in Shanghai, about 50 percent of the respondents expressed the view that the capital market needs more measures to maintain its bullish trend. About 20 percent of the respondents believe that the market will adjust itself through corrections. The survey polled 3,400 retail investors and 600 professionals working with institutional investors.

Uncertainties still remain amid wild swings and it may take a while for the market to consolidate, said a research report from Founder Securities.

Meanwhile the China Securities Regulatory Commission on Wednesday strongly denied reports about an impending leadership change at the market regulator. Media reports had earlier indicated that Xiao Gang, the chairman of CSRC, had been removed from his position.

In other market-related developments, the China Financial Futures Exchange released a statement on Wednesday saying that reports about foreign institutional investors conducting short sales in the A-share market throughindex futures trading was not correct.

The CFFEX statement said it is technically impossible for foreign institutional investors to short sell a specific company's share or a sector's shares in the A-share market. Regulators have also been keeping a close watch on the short selling patterns, the statement said.