Chinese stocks, after returning from the lunchbreak, dived sharply in the afternoon session on media reports a number of brokerages are being investigated for alleged violation of securities regulations.
The Shanghai Composite was down by as much as 6.1 per cent in late trade, with the tech-focused Shenzhen Composite following suit, down by as much as 6.8 per cent. It would be Shanghai's biggest one-day fall since August 25, when the benchmark slumped by 7.7 per cent, writes Peter Wells in Hong Kong.
Earlier this week, China's largest brokerage, Citic, was revealed to have overstated its over-the-counter derivatives business by Rmb1.06tn ($166bn) earlier this year. Yesterday, the company said it would cooperate with China's securities watchdog in an investigation into suspected violation of securities regulations. Rival Guosen Securities said it is also under investigation for suspected violations.