They were joined by Japanese share markets, which continued to drop. But stock indexes in other Asian markets rebounded modestly.
The Shanghai Composite Index (SSEC) Tuesday plunged 6.6% below the psychological 3,000 point mark to end at 2,964.97. The Chinese government had previously indicated that it would support the market up to 4,000.
After the stock markets closed on Tuesday China’s Central Bank cut interest rates and reserve ratios, to aid the stumbling economy. But the news came too late to prevent Tuesday being a second day of huge mark downs. The CSI300 index of top shares on the Shanghai and Shenzhen exchanges lost 7.1 % to finish at 3,042.93.
Many shares traded down by their 10% daily limits and index futures pointed the same way, indicating further pain to come.
Many brokers described “panic selling” as China’s share markets lost a fifth of their value in August, most of that fall happening in just two days, and indexes fell into negative territory for the year to date.
Japanese shares, as measured by the Nikkei 225 Index dived by 3.96%. That followed a 4.6% fall in the Nikkei on Monday.
Tuesday trading in other Asian markets saw investors hold their nerves. Hong Kong’s Hang Seng Index edged up by 0.72% to 21,403.96. South Korea’s KOSPI Composite managed a 0.92% gain to 1,846.63, while Thailand’s SET returned to 1308.40, a gain of 0.56%.
In early trading on Tuesday stock markets in London, Paris and Germany were all up.