A trader follows the trend of the stock market File photo: VCG

China's Shanghai and Shenzhen stock exchanges announced regulatory measures of suspending stock trading for 15 days of accounts that are detected for market manipulation of two listed companies, including Nanjing Chemical Fiber and Zhongtong Bus Holding Co.

Shares of Nanjing Chemical Fiber fell by daily limit of 10 percent on Wednesday to 6.75 yuan ($0.95), while the bus manufacturer Zhongtong dropped by 4.21 percent to 11.38 yuan during the morning session.

Both companies reported abnormal price swings recently. After rising for a consecutive of six days by the daily 10 percent limit, shares of Nanjing Chemical Fibre opened trading up 10 percent to 8.34 yuan on Monday. However, the company's shares tumbled to 6.82 yuan at 2:36 pm - almost the same time that a social media post predicted such a price move - to finish the day down 10 percent.

"(Nanjing Chemical Fibre's stock) will give you a surprise at 2:34 pm," a user posted on financial platform Hithink RoyalFlush Information Network Co at 1:47 pm on Monday, the Shanghai Securities Journal reported. 

On Tuesday, the Shanghai Stock Exchange said it has noticed abnormal price swings of Nanjing Chemical Fibre shares and has immediately launched investigations.

And, on Tuesday, shares of Zhongtong Bus rose by the daily limit of 10 percent at 1:21 pm, which also coincided with a social media post at noon predicting the price surge. 

The abnormality immediately drew the attention of the regulators. The Shanghai and Shenzhen stock exchanges said in two separate statements on Tuesday that they have suspended trading of related stock accounts for 15 days. Meanwhile, the illegal practices face further investigation.

In April, the State Council, the country's cabinet, released a new guideline on strengthening regulation, forestalling market risks and promoting high-quality development of the country's capital market.

The China Securities Regulatory Commission (CSRC) unveiled on May 15 a package of stricter rules, aimed to protect the interests of vast individual investors of Chinese A-shares.

Chinese equities have rallied recently amid a series of supportive measures to boost the healthy development of the capital market, with the Shanghai Composite Index now standing above 3,100 points from its low of 2,700 in late January.

Global Times