BEIJING — Shares in big Chinese state companies have soared after weekend promises of government action to halt a slide in stock prices, but many others sank as jittery small investors tried to cut their losses.
The market benchmark closed up 2.4 percent on Monday but was down 27 percent from its June 12 peak. That came after a group of 21 state-owned brokerages pledged Saturday to buy stocks. On Sunday, the central bank promised more credit to finance trading. Regulators have reduced the number of planned share sales to ease fears of a glut.
Shares of state companies including as PetroChina Ltd., Asia's biggest oil producer, and China's four major state-owned commercial banks rose by up to 10 percent. Trading of almost 900 other companies — out of a total of 2,802 on exchanges in Shanghai and the southern city of Shenzhen — fell by the maximum 10 percent daily limit permitted by regulators, according to the financial news website Hexun.com.
Millions of novice investors piled into the market as the Shanghai index rose more than 150 percent beginning late last year. Some made big profits but the slump has left many with shares worth less than they paid and hoping for a rebound so they can sell.
"I hope I can bow out of the stock market after I break even," said Liu Yun, a Beijing schoolteacher who put 80,000 yuan ($13,000) into the market since last year and now has shares worth 62,000 yuan ($10,000).
A prolonged slump could jolt China's financial system and set back Communist Party plans to make its state-dominated economy more market-oriented and productive.
The reduction in the number of new public stock offerings announced Friday — to 10 in July from 28 previously planned — will hamper party plans for state companies to pay off debts with proceeds from share sales. Investor unease could hurt official efforts to encourage state companies to rely more on capital markets than on politically directed loans from state banks. Such anxiety also might set back government plans efforts to encourage the public to invest for retirement to ease demand for social spending in an aging society.
"I am down on the stock market for the coming two years," said Yu Xing, CEO of a company in the eastern city of Nanjing that makes streaming content for websites. He said he has lost one-quarter of his 400,000 yuan ($65,000) investment since late last year.
The decline has wiped out about 15 trillion yuan ($2.4 trillion) in market capitalization.
"The stock market decline will cause economic losses to investors and have some impact on social stability," said Guo Tianyong, an economist at the Central University of Finance and Economics in Beijing. "The government measures will surely play a role in stabilizing the stock market. But how effective they will be, we still need to wait and see."
AP researchers Dong Tongjian and Yu Bing in Beijing and Fu Ting in Shanghai contributed to this report.