China stock regulator restricts 24 trading accounts for suspected irregularities

OIL: Benchmark U.S. crude lost 38 cents to $48.14 per barrel in electronic trading on the New York Mercantile Exchange.

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China’s stock market extended loss while other global stocks mostly gained Friday after data showed the U.S. economy posted solid growth during the second quarter.

“The government’s pledge to investigate Monday’s plunge could keep the downside to a minimum for now”, Bernard Aw, a strategist at IG Asia in Singapore, told Bloomberg News.

Hong Kong shares also ended 0.47 per cent higher yesterday, following a rally in US and European markets.

Japan’s core consumer price index (CPI) rose 0.1 percent on-year in June , a tad above the 0.0 percent forecast in a Reuters poll.

The Shanghai Composite finished 3.4% up at 3789.16 after trading swung between gains and losses.

Valuations remain elevated after a 29 per cent drop by the benchmark equity gauge.

“We expect Fed voters to pull the trigger in September, but for the path to interest rate normalization to be a long one given the global risk profile, the lack of inflationary pressure, and concerns over what moving too quickly may do to asset markets, particularly the dollar, and the wider economy”, said an analyst at Australia and New Zealand Banking Group. The mainland’s state-owned Kunlun Energy rose 3.8% in Hong Kong. “We have been cautious on investing in A shares”. Margin debt surged fivefold over the preceding 12 months, propelling the Shanghai Composite to a 150 per cent advance.

Shares in technology giant Sony fell by 1.5% despite the company releasing strong results on Thursday after the Japanese stock market had closed.

The volatility in the Chinese equity markets have become common.

The markets regulator, the China Securities Regulatory Commission (CSRC), wants the trading records to try to identify those with net short positions who would profit in case of further falls in China-listed shares, three sources at Chinese brokerages and two at foreign financial institutions said.

Some 505 companies were halted on the Shanghai and Shenzhen exchanges today, or equivalent to 18 per cent of all listings.

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And, even if a pullback was a reason for business and personal consumption to suddenly be stifled, the selloff of Chinese stocks didn’t reach a scary stage until after the beginning of July – well after the data for these reports was compiled. PetroChina Co, the biggest oil producer, slid 3.4 per cent. Air China Ltd fell 8.1 per cent. In his piece “China’s Economy Not Getting High on Stimulants” he plainly points out that April’s industrial productivity growth of 5.9% in China was the second-slowest monthly growth pace since late-2008. A reading abve 50 signals expansion.

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