Shanghai, Hong Kong markets fall following regulatory announcements

The Shanghai Composite Index dropped 1.6% to close at 4,217.08 Monday while Hong Kong’s Hang Seng Index fell 2% and the CSI 300 index slid 1.6%, Bloomberg reported. China’s securities regulator announced measures on Friday to clamp down on the use of shadow financing for equity purchases and increase shares available for short sellers. The Shanghai Composite Index’s trading volumes were 74% above the 30-day average Monday, with combined turnover for it and the Shenzhen exchange climbing to a record RMB1.8 trillion (US$290 billion). The Shanghai gauge trades at 21 times reported earnings, the highest since April 2010 and more than double last year’s low.