China State Construction Engineering, responsible for the world’s largest initial public offering in over a year, saw its shares gain 56% on their Shanghai debut, but this wasn’t enough to stop the market plunging, Bloomberg reported. The Shanghai Composite Index (SCI) closed down 5% to 3,266.43 points on Wednesday, its largest single-day decline in eight months. The CSI 300 Index, which tracks the Shanghai and Shenzhen exchanges, slid by 5.3% to 3,558.51. Jiangxi Copper was among the biggest losers, dropping 9% after it announced a decline in first half profit. However, the overall market malaise was put down to concerns that, with the SCI up 79% this year, the government would try to rein in the market. It has been suggested regulators might order banks to set aside larger reserves or increase the tax on stock trading, while it is generally agreed that bank lending will tighten in the second half, stemming the flow of funds into stocks.
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