Shares in China continued to slide on Tuesday following Monday’s huge sell-off.
The main index, the Shanghai Composite, was down a further 1.7 percent, having fallen 8.5 percent the day before.
The government has tried to calm the situation, saying it will put in place monetary measures to stabilise markets, but that hasn’t stopped criticism from some investors.
“The market is dead”, said one investor. “The government should have told the public they were planning to save the market. If they’re in difficulties they should tell the public. Don’t give us slogans like ‘we have the ability, we have confidence,we have the right conditions’. That’s just cheating us common people. These slogans have to be followed by the details. The market dropped so much yesterday but I didn’t see any official news on the media. It’s a trick to cheat the people.”
Since the middle of June the government has implemented measures to try to calm the markets – limiting short-selling, cutting interest rates, canceling public share offerings and even banning share sales by major stockholders, but some analysts say they have not gone far enough.
“I think they will, sadly, not tighten up on the margin lending”, said Enzio Von Pfeil, an investment strategist at Private Capital Limited. “I think they will probably cut rates yet again. They will inject more money into the system. But they won’t do what is needed to fight this market terrorism, which is to really contain the margin lending itself and that’s why they are going to be breeding the grounds for the next market rout.”
The country’s central bank said it would inject a further 50 billion yuan – 7.2 billion euros – into the money markets, but it might not be enough to stop the slide.