In its latest effort to curb stock market losses and stabilize trading, China Financial Futures Exchange announced Monday night that it would limit daily purchases of CSI 500 index futures to 1,200 lots for rise and fall, according to Xinhua news agency. The measure takes effect Tuesday.
CFFEX also vowed to boost its efforts to probe illegal activities in the market, Xinhua said. This echoed the recent pronouncement from the China Securities Regulatory Commission that it would launch an investigation into suspected stock market manipulation amid the downturn in equities.
Despite a 2.4% rise Monday, the Shanghai Composite Index was still down 27% from its June 12 peak, suggesting that it continues to be on a bear market territory, as retail investors who comprised bulk of the turnover remained skeptical about its recovery.
The government has adopted several measures since last week to support the market and prevent its further decline including a rate cut, a reduction in banks’ reserve requirement ratio, fund infusion from brokerages and asset managers, and a pledge from the central bank to provide liquidity.
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