Securities houses are learning the hard way what it means to be a tool of the state. The largest brokerage houses in China were beneficiaries of the stock bubble.

China’s tumbling stock market showed signs of seizing up yesterday, as companies scrambled to escape the rout by having their shares suspended, and indexes plunged after the securities regulator warned of “panic sentiment” gripping investors.

Beijing intensified efforts at the weekend to pull China’s stock markets out of a nosedive that is threatening the world’s second-largest economy, with top brokerages pledging to buy massive amounts of shares and a report that the government has set up a market stabilisation fund.

China’s economy grew at its slowest pace in 24 years in 2014 as property prices cooled and companies and local governments struggled under heavy debt burdens, keeping pressure on Beijing to take aggressive steps to avoid a sharper downturn.

Alibaba Group Holding slipped in its second day of trading yesterday after jumping almost 40% in its debut as bankers boosted the size of the Chinese e-commerce company’s share offering to a global record of $25bn (€19.5bn).

China’s stocks fell, dragging the Shanghai Composite Index below 2,000 for the first time in almost six months, as factory output and business spending slowed while concern grew that share sales would divert funds.

A technical glitch halted trading on Eurex, Europe’s largest derivatives market, for about 60 minutes, adding to this month’s tally of exchange breakdowns following a three-hour shutdown of the Nasdaq Stock Market.

Global stocks fell again today as fears of a possible US recession combined with worries over Europe’s debt crisis.

Asian stock markets plunged today as fears grew over the deepening world financial crisis.

A surprise last-minute cut in US interest rates failed to steady the world’s stock markets today in the face of growing gloom over a possible economic recession.