China’s Shadow Bank Clampdown Hits Stock Market
- Shanghai Composite recovers after decline to two-month low
- Rebound on bargain-hunting, state support speculation: analyst
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Chinese stocks rallied in late trade as markets took a closer look at the nation’s new plans to rein in shadow banks and some traders speculated that state funds would act to stem excessive losses.
The Shanghai Composite Index closed 0.3 percent higher, after falling as much as 1.4 percent to a two month-low. The ChiNext gauge of mainly technology companies led moves in both directions and ended the day 1.4 percent stronger. Stocks had tumbled across the board in the morning amid concern that the latest attempt to tighten supervision of $15 trillion in asset-management products would siphon funds from the market.