China to prevent abnormal market fluctuations, says CSRC

(Bloomberg) — China pledges to maintain capital market stability and resolutely prevent abnormal market swings, the securities regulator said on Sunday as the country’s stock sell-off deepened.

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According to the China Securities Regulatory Commission, authorities will actively cooperate with relevant parties and coordinate the implementation of various measures to stabilize the market and enhance confidence.

The sell-off in Chinese shares deepened last week, with a major index falling to a five-year low. The CSI 300 Index benchmark fell 6.3% in January, a record sixth straight month of losses. That was followed by expectations of a 2 trillion yuan ($278 billion) rescue package and the central bank’s decision to cut banks’ reserve requirements.

CSRC will take strict action against illegal activities such as market manipulation, malicious short selling, insider trading and fraudulent issuance, in accordance with the law, it added. China previously stopped lending certain stocks for short selling in an effort to prop up slumping stock markets.

The authority will also step up efforts to bring more medium- and long-term funds to the market, it added.

(Updates with more details.)

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