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Freak Chinese stockmarket surge under investigation
by Dylan Lobo on Aug 16, 2013 at 08:09
The biggest intraday surge in Chinese stocks since March 2009 is under investigation.
According to data compiled by Bloomberg, around 9.7 billion shares on the Shanghai Composite Index were exchanged at 1.07pm local time versus 5.6 billion at the corresponding period of the previous day.
This 76% jump in trading volume saw the benchmark swing violently from a loss to 5.6% gain. This gain was subsequently pulled back to leave the index 1.7% higher.
Bloomberg said it spoke to technical services official at the bourse who indicated the surge was being ‘looked into’.
A statement posted on the Shanghai Composite’s official microblog said its ‘operations are normal,’ according to the news agency.
In an absence of major company or domestic macro news the spike was a surprise, especially given the rest of Asia was hit by renewed fears that quantitative easing was coming to an end on the revival of the US economy.
The fears were triggered by a strong job report showing the number of people filing for unemployment benefits fell to a six year low.
At the same time US inflation ticked up by 0.2% to hit the Federal Reserve’s 2% target, increasing concern that QE could cause inflationary problem in the world’s biggest economy.
The Dow lost 1.5% overnight, it biggest daily fall in two months, while the Nikkei was down 0.75% shortly before the closing bell in Tokyo.
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