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An investor looks down in front of an electronic board showing stock information at a brokerage house in Fuyang, Anhui province, China, June 29, 2015. |
SHANGHAI -- China's stock markets continued their plunge Friday, to end the week 12 percent lower, amid a growing debate about who’s to blame for the recent sell-off, which has wiped close to 30 percent off the market’s valuation in less than a month.
The Shanghai Composite Index (SCI) fell for the third consecutive day, closing 5.77 percent down at 3,686.92, well below what's seen as the psychologically important 4,000 mark -- or roughly where the market was three months ago, before a heady boom took it to a seven-year high of more than 5,200 points in the first half of June, leading to euphoria among Chinese retail investors.
That mood has now turned to anger, as more than $2.65 trillion in market value has been wiped out in three weeks. And the search for a scapegoat continued on Friday. The official Xinhua news agency reported that Financial News, a newspaper under China’s Central Bank, had repeated allegations that foreign banks and traders might be to blame for what some have described as “malicious” short-selling of Chinese shares -- although other media said investors had only themselves to blame.
China’s securities regulator announced on Thursday that it was investigating possible market manipulation, based on what it described as “unusual moves” on Shanghai’s stock and futures exchanges, relating to stock-index futures. And on Friday regulators announced they were suspending trading in some 20 short-selling accounts.
Publicly, however, the authorities have -- some have argued belatedly -- debunked the theory, which had been gaining traction online in the past few days, that foreign capital was to blame for this week’s falls (which wiped out the gains from a short-lived rebound on Tuesday, the market’s highest one-day rise in six years). The China Financial Futures Exchange on Wednesday denied speculation that "overseas investors have been shorting A-shares via stock futures," the China Daily reported.