China stocks fell sharply on Monday before recovering much of their losses as regulators cracked down on speculators which Beijing blames for a 40 percent crash in the country’s stock markets since June.
Both main indexes plunged more than 4 percent at one point, pulling down markets across Asia, before paring losses in the afternoon.
The blue-chip CSI300 index .CSI300 managed to claw back into positive territory in late trade, ending up 0.7 percent at
3,366.54 points. But the Shanghai Composite Index .SSEC fell 0.8 percent to 3,207.07.
Both indexes shed around 12 percent for the month, their third straight monthly decline, and have lost nearly 40 percent of their value since mid-June despite repeated and unprecedented measures by the government to shore up the market.
“A pull back in the market was to be expected as some investors are taking profits after the two-day rally,” wrote Gerry Alfonso, director of Shenwan Hongyuan Securities, referring to a rebound on Thursday and Friday after ferocious selling earlier last week.
“Investors seem to be waiting until the manufacturing PMI figure is released later this week before making significant decisions.”
