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Wednesday, August 26, 2015, 17:34

China stocks shed gains to close down

By Xinhua
China stocks shed gains to close down
An investor gestures as he checks share prices at a securities firm in Shanghai on August 26, 2015. Shanghai stocks closed down 1.27 percent in volatile trading on August 26, extending days of falls despite a central bank interest rate cut aimed at boosting the flagging economy and slumping shares, dealers said. (CHINA OUT AFP PHOTO)

BEIJING - Chinese stocks fluctuated wildly and ended lower on Wednesday despite the latest monetary easing moves by the central bank.

The benchmark Shanghai Composite Index closed 1.27 percent lower at 2,927.29 points, plunging more than 3 percent during the morning session and jumping over 4 percent at its afternoon peak.

The smaller Shenzhen Component Index lost 2.92 percent to close at 9,899.72. The ChiNext Index, which tracks China's Nasdaq-style board of growth enterprises, shed 5.06 percent to end at 1,890.04.

Losers outnumbered winners by 654 to 257 in Shanghai and 1,012 to 344 in Shenzhen. More than 660 shares fell by the daily limit of 10 percent, while 47 shares rose by 10 percent.

The market extended losses seen in the past four trading days, which came after the release of weak economic data and depreciation of the yuan. The benchmark Shanghai index dived 8.49 percent on Monday, its biggest daily slump since February 2007.

On Tuesday evening, the People's Bank of China (PBOC) cut interest rates for one-year lending and deposits by 25 basis points, and announced a reduction of the reserve requirement ratio (RRR), the portion of money banks need to set aside as reserves.

This is the fourth RRR reduction in nearly seven months, and the fifth round of interest rate cuts in nearly nine months.

China stocks shed gains to close down
Graphic charting the performance of Shanghai Composite Index over five days. (Graphic / AFP)

The central bank said the moves were aimed at supporting the real economy amid downward pressure on growth and fluctuations in global financial markets.

The easing only allowed battered investors to take a breath, and the market's downward trend has not changed for the moment, according to a note from AVIC Securities.

Aircraft and motorbike makers lost the most. AVIC Aircraft dived 10 percent to 22.79 yuan, while motorcycle firm Lifan Industry (Group) also fell 10 percent to 9.09 yuan.

Banks and insurers were the biggest winners. China Merchants Bank jumped 9.38 percent to 16.09 yuan. China Pacific Insurance rose 5.94 percent to 20.14 yuan.

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