CHINA’S policymakers and regulators tried to soothe the country’s jittery stock market yesterday, promising deeper financial market reforms and stressing the economy was showing signs of stabilizing, as stocks resumed trading after a four-day long weekend.

    Looking to draw a line under wild gyrations in the Chinese equity market, which has fallen 40 percent since mid-June, China’s securities regulator said it would take more steps to ensure a stable market, while government officials said the worst of the volatility was over.

    “The government won’t normally intervene, but when there are severe, abnormal fluctuations in the market, the government can’t just sit on the sidelines and must take decisive and timely measures,” the China Securities Regulatory Commission said late Sunday.

    It added it would consider launching a circuit breaker system for the country’s stock indices to halt trading for an unspecified period of time if there are particularly wild price moves.

    The regulator will also scrutinize algorithmic trading, curb speculation on index futures and step up regulation covering stock financing.

    Chinese regulators are grappling to control price swings in the stock market. In the last two weeks, China moved to limit trading of stock index futures by lowering the bar for what it called abnormal trading and increasing margin requirements and settlement fees.

    Under current rules, individual stocks and index futures can rise or fall by no more than 10 percent per day from the previous closing level.

    Policymakers are determined to show their financial markets are back to normal, after the wild swings in stocks combined with last month’s surprise devaluation in the yuan caused jitters in markets around the world.

    China’s Central bank governor Zhou Xiochuan told financial leaders from the world’s 20 biggest economies over the weekend that Chinese equity markets had almost completed their correction after a steep run up in the first half of the year.

    “Currently, the yuan to U.S. dollar exchange rate already tends toward stability, the stock market adjustment is already roughly in place and financial markets can be expected to be more stable,” Zhou told G20 finance ministers in Turkey, according to a statement from the People’s Bank of China, the central bank. (SD-Agencies)