By Chao Deng
Chinese shares finished lower Thursday, swinging wildly in the
last hour of trading, and extending a pattern of intraday
volatility that started with mid-June's selloff.
The Shanghai Composite ended down 2.2% at 3705.77, after
snapping a three-day losing streak on Wednesday. The index traded
as high as 1.5% and as low as 2.7%, or within a 4.2% range. That
compares with a range of 4.9% on Tuesday and 9.1% on Monday, when
the index suffered its worst daily percentage decline in more than
eight years.
The volatile trading follow authorities' recent signals to
continue supporting the market and steps to investigate sharp
declines.
The smaller Shenzhen Composite ended 3.2% lower at 2128.16.
Hong Kong's Hang Seng Index was down 0.4%, while a gauge of
Chinese companies listed in the city was down 2.7%.
Earlier this week, China's stock regulator said it would
continue to support the market, though authorities don't disclose
the pace of buying, or the total amount that they have bought up in
stocks.
Officials also are investigating possible coordinated dumping of
shares, after earlier this month restricting senior executives and
shareholders who own more than a 5% stake from selling for six
months.
The securities watchdog has investigated a total of 27 listed
firms over share sales in violation of rules in July, according to
a report by state-run People's Daily.
On Wednesday, the securities regulator said a listed arm of
China's state-owned aerospace and defense company and its two
largest shareholders are under investigation for potential
violation of stock-selling rules. Shares of AVIC Heibao Co. were up
5.4%.
The crackdowns have made some investors uneasy, with an
increasingly unpredictable pace of regulatory changes.
"Investors are in a limbo due to uncertainty of regulation. The
regulator sets the rules and changes the rules without any sign,"
said Zhang Xin, analyst at Guotai Junan Securities.
The selling this month appears to have helped flush out
leveraged bets in the market. Vincent Chan, an analyst at Credit
Suisse, said that financing for buying stocks by informal lending
channels, as tracked by one major trading system, likely dropped
sharply since mid-July. Authorities have been clamping down on
margin financing--the borrowing of money by brokerages and
unofficial lenders to investors--in an attempt to stamp out
speculative activity. Margin loans spur stocks to rise and fall
quickly.
Still "the direction may be irreversible," Mr. Chan wrote in a
note Thursday. "Informal activities will turn back to offline and
be underground, only to serve big individual clients as they were
before."
Asian shares elsewhere mostly rallied after the Federal Reserve
offered few clues on plans to raise interest rates for the first
time in nearly a decade. Its easy-money policy, mirrored by central
banks around the world, has helped fuel stock gains since the
global financial crisis, and a delay in raising rates could give
stocks more steam.
The Nikkei Stock Average rose 1%, helped by a weaker yen. The
Japanese currency was last at Yen124.15 compared with a close of
Yen123.94 in New York.
Australia's S&P ASX 200 was up 0.8% and South Korea's Kospi
was off 0.9%.
In South Korea, shares of Samsung Electronics Co. were down 3.8%
after the firm logged its fifth-straight year-over-year drop in
profit. Sales for the company's flagship Galaxy S6 smartphone fell
short of market expectations and hurt profit.
In commodities, an unexpected decline in U.S. crude-oil supplies
and production led to a recovery in oil prices. Brent crude, the
global benchmark, was up 16 cents at $53.55 a barrel in Asian
trade. Prices have slumped this month on renewed fears about a
global glut and faltering demand from China, one of the world's
biggest consumers.
Gold prices rose sharply after the Federal Reserve's statement,
but quickly gave up gains. Gold rallied as high as $1,100.90 a troy
ounce in aftermarket trading Wednesday as is currently at $1,084.50
in Asia.
Gold had sank to five-year lows in recent weeks amid
expectations for a rate increase, which could incite investors to
move to higher-yielding assets.
Yifan Xie contributed to this article.
Write to Chao Deng at Chao.Deng@wsj.com