The Shanghai Composite Exchange Index at trading on July 9 increased by 5.8% and amounted to 3,709.33 points. This is the index's highest daily rise since 2009. Over the previous month, its capitalization fell by $3.9 trillion

Following the trading results on July 9, the main index of the Shanghai Exchange, the Shanghai Composite, grew by 5.8% and reached 3,709.33 points. This is its maximum growth in one session since 2009. Prior to this, the index had been declining for 13 days in a row, and in just the last month it “fell in price” by $3.9 trillion.

According to Bloomberg , shares of about 600 companies rose in price by 10%, after which trading in them was suspended due to exceeding the daily limit.

According to the FT, today another 194 companies suspended trading in their securities for various reasons. The total number of securities for which trading has been suspended has reached 1,439, Bloomberg reports . That is, investors can now trade only on “half” of the Chinese market - about 2.8 thousand securities are registered on the mainland exchanges of Shanghai and Shenzhen.

The rapid growth of the Shanghai Composite occurred after the day before the Chinese Securities Regulatory Commission introduced a six-month ban on the sale of securities of public companies by majority shareholders. The moratorium applies to shareholders who own more than 5%. In addition, the ban on the sale of shares also applies to top management of companies.

On Wednesday, a temporary ban was also introduced for state-owned companies to sell shares on stock exchanges. This step is intended to dampen abnormal fluctuations in stock markets.

At the end of last week and the beginning of this week, the People's Bank of China, which serves as the central bank, announced support for the stock market. For this purpose, the China Securities Finance Corp (CSF) agency formed in 2011 will be used. Its original purpose was to support brokers in mainland China who were engaged in margin trading, that is, transactions using borrowed funds.

CSF will be able to buy shares directly with the help of financing from the People's Bank of China. The agency will provide $41.8 billion in loans to brokers. These funds will then be used to purchase securities.

Even before the prohibitive measures of the Chinese government, many companies listed on the Shanghai Stock Exchange suspended trading in their shares under various pretexts. According to Reuters , general formulations were used as reasons - the upcoming disclosure of a “material fact” or restructuring. According to exchange sources, it was about the desire of issuers to “wait out” the period of volatility.

As HSBC, Bank of America Merrill Lynch and UBS write in their materials on China, the main reasons for the fall in the index of China's leading exchanges in Shanghai and Shenzhen are the illiteracy of private investors, as well as an excessive share of trading with leverage (borrowed funds). According to HSBC, they accounted for up to 16% of the market.

Before the fall began at the end of June, the Chinese stock market had been growing without changing trend (20 percent decline) for 935 days.

Shanghai Stock Exchange Index makes record jump since 2009