China stems stocks rout, but market still facing lengthy hangover

Beijing’s increasingly frantic attempts to stem a stock market rout were finally rewarded as Chinese shares bounced around 6% yesterday, 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 would allow lenders to roll over loans backed by stocks.