China stocks bounce as Beijing brings down ‘big fist’ on market meltdown, but at what cost?

Asian stocks markets were volatile on Thursday as China's main index seesawed after a prolonged sell-off while Hong Kong's benchmark rebounded strongly.

BEIJING/SHANGHAI – Beijing\’s increasingly frantic attempts to stem a regular market rout were finally rewarded as Chinese shares bounced around 6 percent on Thursday, but the costs of heavy-handed state intervention are likely to weigh on the market for a long time.

The rebound came after China\’s securities regulator, in its most drastic step yet to arrest the slump, banned shareholders with large stakes in listed firms from selling. The banking regulator said separately it might allow lenders to rollover loans backed by stocks.

The CSI300 index of the largest listed companies in Shanghai and Shenzhen raced higher to close up 6.4 percent, while the Shanghai Composite Index bounced 5.8 per cent for its biggest daily per centage gain in six years.