Shanghai Composite Sinks Toward 3,500 as State-Backed Gains Fade

Chinese stock traders put the government’s market rescue to the test, sending the Shanghai Composite Index to within one point of its low during the depths of a $4 trillion selloff last month.

The benchmark index dropped 4.3 percent to 3,507.74, clawing its way above the 3,500 level in the last five minutes of trade. With data Friday showing the manufacturing sector is at the weakest since the global financial crisis, investors are trying to gauge how far state-linked funds will go to prop up share prices. Hong Kong’s Hang Seng Index entered a bear market after dropping more than 20 percent from its April 28 peak.