Shanghai index plunges more than 6 percent
SEOUL, South Korea — The Shanghai share index plunged more than 6 percent Tuesday, its biggest drop in three weeks, as investors resumed sell-offs of Chinese stocks despite the stabilization of the Chinese yuan after a sharp devaluation last week.
Other Asian stock markets also turned lower in afternoon trade.
The Shanghai Composite Index fell 6.2 percent to 3,748.16, its largest drop since the index’s 8.5 percent dive on July 27, its biggest slide in eight years.
The plunge in Chinese shares came even as the government took support measures this summer as the index’s sizzling yearlong rally reached unsustainable heights and began a dramatic fall in June.
The announced measures including banning major shareholders from selling any of their shares. But the stability was short-lived as the sell-offs restarted.
The weak Shanghai stock market underlines persistent worries about China’s economic growth despite continued government measures.
China’s surprise move last week to devalue the yuan is expected to aid Chinese exports and help make the Chinese currency more responsive to market forecasts. But it also renewed questions about the outlook of the world’s second-largest economy. The prices of oil, metal and other commodities fell.
Since Beijing’s move last week to devalue its tightly controlled yuan, the currency remained stable this week.
But some investors are selling Chinese assets, including stocks, on expectations the yuan will fall further, said Angus Nicholson, a market analyst at IG.