Shanghai shares close down 4% following word of tightened margin trading

After closing Monday at its second-highest level for the year the Shanghai Composite Index fell 4% on Tuesday after state media reported that another two securities firms, Tebon Securities and Haitong Securities (6837.HKG, 600837.SHA), had raised requirements for margin financing, The Wall Street Journal reported. The companies have raised the cash clients must deposit and reduced the amount of securities they can use as collateral for short selling and margin trading. That followed a similar decision by the larger Citic Securities (6030.HKG, 600030.SHA) to raise its own margin-trading requirements. Hong Kong’s Hang Seng Index was down 1.6%, its fourth straight loss-making day.