China's stock market had yet another sell off on Friday, shedding 4.21% to wipe away the remaining gains from a dramatic market rescue launched by Beijing in early July.
The benchmark Shanghai Composite closed at 3,507 points, a level that many analysts believe Beijing will try to defend at all costs. Even with a late rush of buying, the index closed down more than 11% for the week. Many companies listed in Shanghai, including some large state-owned firms, fell by the maximum daily limit of 10%. The smaller Shenzhen Composite index shed 5.4% on Friday, taking losses for the week to 11.5%.
The first signs of trouble came in June, after the Shanghai Composite peaked at more than 5,100 points, a gain of roughly 150% over the previous 12 months. When the bubble burst, the index lost 32% of its value in just 18 trading sessions, reaching a low of 3,507 points on July 8. Beijing reacted forcefully. The central bank cut interest rates to a record low, regulators suspended new IPOs and threatened to throw short sellers in jail.
