Chinese shares sank on Tuesday, a day after Shanghai's steepest slide in eight years, defying renewed Government vows of support that analysts warned were not enough to settle nervous investors. The fresh losses, in a volatile session, came despite an unprecedented effort by the Government of the world's second largest economy to shore up prices following a month-long rout.
The recent turmoil followed a stock boom encouraged by the authorities, and their willingness to intervene in the market has raised questions over their commitment to economic reforms. The Shanghai Composite Index fell 1.68 per cent, or 62.56 points, to 3,663.00 on turnover of 685.1 billion yuan ($112.0 billion) after falling as much as 5.0 per cent and rising up to 0.93 per cent during the day.
The Shenzhen Composite Index, which tracks stocks on China's second exchange, ended down 2.24 per cent, or 48.39 points, at 2,111.70 on turnover of 618.8 billion yuan. Some of China's legions of small investors -- who dominate the market, unlike most exchanges worldwide, where institutions are the largest stockholders -- say they are heading for the exits. “I sold 90 per cent of my stocks since I saw several reports saying that the market is due for a correction,” said ling lihui, a manager at a market research company, who sold last week.