The unexpected 130 billion yuan injection by the People’s Bank of China into money markets – the largest such injection since September – appeared timed to reassure Chinese retail investors, who are always sensitive to liquidity signals, that the bank would support the market with cash.
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A new “circuit breaker” mechanism aimed at curbing sharp swings went into effect on Monday, closing markets early, but analysts said its introduction added to traders’ nervousness, prompting them to sell rather than risk being caught with holdings they could not liquidate.
The CSI300 index rose 0.1 per cent to 3,482.41 points at 1:27 GMT, while the Shanghai Composite Index gained 0.1 per cent to 3,291.19 points.
Regional stock markets sank further into the red for the second day running yesterday, after China’s efforts to quell the turmoil in the stock market failed to soothe investors.
US stock index futures pared losses to point to flat to higher open as oil struggled for gains amid pressure from jittery Chinese markets. The U.K.’s FTSE 100, France’s CAC 40 and Germany’s DAX index were also down over 1.3 percent each.
Crude oil was lower as investors fretted about the state of the Chinese economy, a stronger dollar and rising tensions in the Middle East.
The Dow Jones industrial average fell 25 points, or 0.1 percent, to 17,124 as of 10:13 a.m. Eastern time Tuesday.
The retailer saw shares drop 5% after revealing that full-price sales fell 0.5% across its stores in the 60 days to December 24, while sales across its Next Directory online and catalogue arm lifted 2%.
Among stocks moving in premarket trading, First Solar and SolarEdge Technologies rose at least 1.8% after Goldman Sachs Group recommended buying the shares.
South Korea’s Kospi index finished down 0.3% to 1,925.43, but the index was already lower before the news of the bomb.
The decision was made after Chinese stocks dropped 7%, triggering a halt in trading on the Shanghai stock exchange and sparking a global sell-off of stocks.
London’s top faller was mining giant Anglo American, which tanked by nearly 9 percent in value on demand fears in leading commodity consumer China.
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Restrictions on large sales will allow regulators “to realize the orderly withdrawal of temporary measures for the extraordinary volatility of the market”, said the CSRC statement dated Tuesday.
