China\u2019s move to raise margin requirements for leveraged stock trading signalled regulators\u2019 push to steer clear of boom-and-bust cycles, while strengthening the stock market\u2019s role in funding the country\u2019s tech self-sufficiency efforts, according to analysts.<\/p>\n
\u201cThe signal from regulators was crystal-clear: guide the market towards a stable transition to a slow bull run,\u201d said Wang Jun, a strategist at BOC International<\/a> in Shanghai.<\/p>\n \u201cInvestors should reduce their leverage levels to guard against the risk of volatility from sentiment swings. The focus of the market will gradually return to fundamentals.\u201d<\/p>\n The Shanghai<\/a>, Shenzhen<\/a> and Beijing<\/a> stock exchanges said in separate statements on Wednesday that the margin requirements for leveraged stock buying would increase to 100 per cent from 80 per cent, effective on Monday, with the changes applied only to new contracts.<\/p>\n The tightened margin trading rules had an immediate impact by cooling market sentiment.<\/p>\n On Thursday, the Shanghai Composite Index slid 0.3 per cent, extending a decline of the same percentage a day earlier. Smaller technology stocks \u2013 the sector with most exposure to leveraged buying \u2013 fared worse. The index of the biggest 50 companies on Shanghai\u2019s Nasdaq-style Star Market fell 0.5 per cent.<\/p>\n","protected":false},"excerpt":{"rendered":"China\u2019s move to raise margin requirements for leveraged stock trading signalled regulators\u2019 push to steer clear of boom-and-bust…\n","protected":false},"author":2,"featured_media":416696,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,3686,1071,219882,99,512,219878,164,29346,4933,29950,219880,13433,219879,219881],"class_list":{"0":"post-416695","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-au","9":"tag-australia","10":"tag-beijing","11":"tag-bloomberg","12":"tag-boc-international","13":"tag-business","14":"tag-china","15":"tag-chinese-traders","16":"tag-economy","17":"tag-morgan-stanley","18":"tag-shanghai","19":"tag-shanghai-composite-index","20":"tag-shanghais-star-market","21":"tag-shenzhen","22":"tag-tech-self-reliance","23":"tag-tosperity-securities"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/416695","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=416695"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/416695\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/416696"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=416695"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=416695"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=416695"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}