(Reuters) - Chinese stock markets tumbled again on Wednesday as investors shrugged off a series of support measures by Chinese regulators, including the central bank’s first public statement in support of the market since it cut interest rates in late June.
The CSI300 index slumped more than 7% at the open and was down 4.8% at 3,739.18 points by 0208 GMT.
The Shanghai Composite Index dropped 8% and was down 4.7% at 3,551.13 points by mid-morning.
Both indexes have slumped some 30% from mid-June peaks. At current average rates of decline, both indexes could give up all their yearly gains as soon as next week.
China stock futures pointed to further losses. The CSI300 stock index futures for July fell 6.2%, to 3,611, 128.2 points below the current value of the underlying index.
Losses on the mainland also weighed heavily on Hong Kong shares, with the Hang Seng Index down 3.3% and shares of Chinese companies listed in the city falling 4.2%.
The People’s Bank of China said on Wednesday before stock markets opened that it would support market stability by providing liquidity through borrowing, bond issuance, collateral backed financing and re-lending, while guarding against systemic financial risk.
The statement came shortly after announcements by other regulators, including one by China Securities Regulatory Commission spokesperson Deng Ge warning of panic in the market and increasing “irrational selling” of stocks.
The CSRC said it would provide liquidity to brokerages via the China Securities Finance Corp, a state-controlled industry body, and would also monitor conditions in the small-cap CSI500 futures market.
The China Securities Finance Corp said it will step up purchases of shares in medium and small-cap stocks, which have been selling off rapidly as investors migrate into large-cap blue-chip shares targeted for investment by the stock stabilisation fund, or sell out of the market entirely.
The China Financial Futures exchange announced it would raise requirements for short positions against CSI500 index futures, which would make it more difficult to short that index, while the insurance regulator chimed in by allowing insurers to buy more blue chip stocks.
None of the announcements inspired confidence in morning trade.
Listed companies are hurrying to escape the rout by suspending trading in their shares. Over 500 China-listed firms on Wednesday announced trading halts on the Shanghai, Shenzhen Exchange, an analysis of company statements showed, sharply increasing the number of firms looking to take shelter from the crash.