Chinese stock exchanges have quietly imposed daily limits on net share sales by hedge funds and large retail investors, according to four sources says Reuters, as authorities move to stabilise markets amid an escalating trade war with the U.S.
The soft cap—set at 50 million yuan (approx. $6.8 million) per investor per day—is being enforced through verbal warnings from brokerages. Investors who exceed the limit risk having their trading accounts suspended, sources said. A formal directive from the exchanges reportedly underpins the measure, but neither the Shanghai nor Shenzhen bourses responded to requests for comment.
The restrictions come as China steps up efforts to shield its markets from the volatility triggered by U.S. President Donald Trump’s new wave of steep tariffs, which now include duties of up to 125% on some Chinese goods. While global markets have seen sharp losses, China’s equity market has remained relatively stable thanks to state-backed interventions.
These include increased stock purchases by the state fund Central Huijin, a wave of corporate share buybacks, and commitments from top brokerages to help steady the market. Brokerages have also been instructed to closely monitor trades from major private funds and retail clients.
A notice viewed by Reuters warned that the 50 million yuan limit could be reduced further if selling pressure intensifies. Chinese and Hong Kong stocks rebounded on Friday, trimming earlier losses despite the rising trade tensions.
This article was written by Eamonn Sheridan at www.forexlive.com.