China Stocks Hammered Again As Confidence Melts

Chinese stocks tumbled further Friday morning amid a fresh wave of panic selling, as a flurry of recently released measures by the Chinese government and the central bank failed to bolster investor confidence. The Shanghai Composite Index plunged 6.9% to 3,645, adding to the previous day's 3.5% fall. The benchmark index has sunk roughly 30% from its June 12 peak, falling 9 out of the 13 past trading sessions. The China Securities Regulatory Commission, the nation's financial regulator, said Thursday night on its website that it had decided to launch an investigation into suspected market manipulation possibly linked to recent market turmoil. At the same time, People's Bank of China Gov. Zhou Xiaochuan pledged Thursday in an internal meeting that the central bank would hold the line against systemic and regional financial risk. Dragged by the weakness in mainland Chinese stocks, Hong Kong's Hang Seng Index turned lower after brief opening gains, down 0.3%, with the mainland-China-tracking Hang Seng China Enterprises Index losing 1.3%. Chinese brokerage firms suffered sharp losses, as Shenwan Hongyuan H.K. Ltd. dropped 7.4%, China Everbright Ltd. slid 6.1%, and Citic Securities Co. sagged 4%. Insurers were also hit hard, with Citic Securities Co. down 6.2%, China Pacific Insurance Group Co. off 5.6%, and PICC Property & Calsualty Co. dropping 3.9%. However, several Macau casino operators bucked the weak trend to add to their recent gains, as Sands China Ltd. advanced 1.4%, and rival MGM China Holdings Ltd. crept 0.4% higher.