China ups securities tax, markets tumble

China tripled the tax on securities trading today in an effort to cool down its hot stock market, China's Xinhua News Agency said.

China tripled the tax on securities trading today in an effort to cool down its hot stock market, China’s Xinhua News Agency said, citing the country’s Finance Ministry.
The increase took its toll on China’s major indicators: China’s Shanghai Composite Index fell 6.5% to 4,053.09, while the Shenzhen Composite Index fell 7.2%.
The move to increase the “stamp tax” on stock trades from 0.1% to 0.3% comes as Chinese stock prices have risen more than 50% this year, as many new investors have jumped into the market, raising fears that they may be hurt by a drop in prices.
An official with the finance ministry said that the tax increase is intended to help promote healthy development of the securities markets, according to the report.
The move followed China’s announced May 18 hikes of the yuan floating range, benchmark interest rates, one-year lending rate and the deposit rate (InvestmentNews, May 18) .