Chinese stock exchanges have reportedly asked investment funds to refrain from being net sellers of equities as the domestic stock market reels under a selling wave.
What Happened: The Shanghai and Shenzhen stock exchanges issued "window guidance" to several large mutual fund houses to avoid selling more domestic shares for a day, Bloomberg reported, citing people familiar with the matter.
The report said this is a familiar tactic the country uses in times of adversity, and this time around the economic slowdown and a crisis brewing in the shadow banking industry may have precipitated the move.
Close on the heels of another slew of weak data points, the People's Bank of China announced a surprise rate cut on Tuesday.
The government is standing ready to support with more measures, the report said.
The Chinese Shanghai Composite Index was down in seven of the past eight sessions, with the recent weakness primarily attributable to a default by property developer Country Garden.
See Also: Best Chinese Stocks
Why It's Important: CNBC Mad Money host Jim Cramer on Tuesday issued a prescient call, asking his followers to buy high-profile China tech stocks such as Alibaba Group Holding Limited BABA, Baidu, Inc. BIDU and JD.com, Inc. JD.
Cramer said he expects the country to stimulate its stock market. "When they do that it usually works," he said.
China's Shanghai Composite Index ended Wednesday's session down 0.82% at 3,150.13.
The iShares MSCI China ETF MCHI, an exchange-traded fund that tracks the performance of China stocks available for overseas investors, ended down 1.65% at $44.76, according to Benzinga Pro data.
Read Next: China’s Central Bank Unexpectedly Slashes Rates To Bolster Struggling Economy
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