China’s woes are just beginning. Thursday saw Chinese stock markets prices bouncing around after the securities regulator banned shareholders with large holdings—more than 5 per cent-- in listed firms from selling for the next six months on Wednesday.
After falling for most of the day, shares turned around slightly on Asian markets but the yen slid against the dollar.
China's CSI300 index was up 1.6 percent and the Shanghai Composite Index had gained 0.6 percent. Both indexes started the day significantly lower.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.9 percent early in the day, but then was up 0.8 percent, after touching a 17-month low on Wednesday.
Japan's Nikkei trimmed earlier losses and was last down 0.7 percent as Chinese stocks reversed their fall. Hong Kong's Hang Seng soared 2.9 percent.
China’s two main stock markets have dropped close to 30 percent over the last three week and all attempts by authorities to stop the bleeding have failed so far.
Regulators stepped in as China's police announced that they will be investigating potentially “malicious short-selling” of shares but they are giving banks permission to roll over loans backed by stocks.
Global Risk Feared
Some analysts fear that the chaos in China’s market could prove to be more of a risk worldwide than the crisis currently playing itself out in Greece and the U.S. is worried that the stock market crash could jeopardize Beijing's economic reform agenda.
"The concern, that is a real one, is what does it mean about long-term growth in China," U.S. Treasury Secretary Jack Lew said on Wednesday at an event in Washington on financial stability.