The Shanghai and Shenzhen stock markets extended losses on Friday after regulators launched a probe into suspected market manipulation.

The Shanghai Composite Index shed 127.20 points, or 3.25%, to 3,785.57, on a turnover of RMB365.8 billion in the morning trading session. The Shenzhen Component Index dropped 358.59 points, or 2.77%, to 12,565.60 on a turnover of RMB267.9 billion. Both markets fell 7% at one point. According to mainland financial media Caixin, over 1,200 stocks suspended trading.

Meanwhile, the Hang Seng Index slipped 0.23% to 26,222.77 by midday.

Photo: Liberty Times Net.

Zhang Xiaojun, spokesman for the China Securities Regulatory Commission (CSRC), said Thursday night that the regulator has launched an investigation into suspected market manipulation in light of recent “significant losses” in the stock markets.

“The CSRC has decided to organise law enforcement forces to establish a probe into alleged market manipulation, (we are) especially looking into clues about cross-market violations,” a message posted on the CSRC’s official Weibo page at 9:48pm said.

The Shanghai Composite Index closed 3.48% lower at 3,912.77 points on Thursday. The Shenzhen Component Index dropped 5.32% to 12924.19 points.

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Vivienne Zeng

Vivienne Zeng is a journalist from China with three years' experience covering Hong Kong and mainland affairs. She has an MA in journalism from the University of Hong Kong. Her work has been featured on outlets such as Al Jazeera+ and MSNBC.