China stocks fell on Tuesday, wiping out gains made the previous day and casting doubt on the potency of the government’s aggressive measures aimed at stabilizing the market, the Wall Street Journal reported.
Stocks in Hong Kong extended a selloff after their biggest fall in three years on Monday, the newspaper said.
Some analysts said Tuesday’s decline in the A-share market was due to margin calls as brokerages asked investors to return the money they borrowed to buy shares.
“The pressure on margin calls remain heavy,” Qian Qimin, an analyst at Shenyin Wanguo Securities, was quoted as saying.
“The entire clearance process, in our view, may last a few more weeks,” Nomura said in a research report.
China has rolled out a package of measures to arrest the selloff that erased US$2.4 trillion in the value of stocks over the past three weeks.
Over the weekend, 21 brokerages pledged to invest in stock-rescue fund, while the central bank said it will provide funds to allow investors to borrow money to buy shares.
Despite the recent rout, Shanghai shares are up 82 percent over the past year, and 16 percent since January, the report said.
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