(Adds context, details of news coverage)
SHANGHAI Jan 20 Speculation that China's
regulators intentionally sought to suppress a stock rally by
taking actions that led to Monday's sharp drop in share prices
"is not consistent with facts", said Deng Ke, spokesman for the
China Securities Regulatory Commission (CSRC).
Deng's denial that regulators intentionally clipped the
market was carried on the CSRC website late on Monday and
published on the front page of China's main securities
newspapers - China Securities Journal, Shanghai Securities News
and Securities Times - on Tuesday morning.
The country's two main indexes both fell 7.7 percent on
Monday, their biggest losses since June 2008, and the plunge
wiped out around $315 billion of market value from the Shanghai
stock exchange, the country's biggest.
The price collapse came after the CSRC on Friday punished
industry heavyweights for illegal operations in their margin
trading. Banks were hit after the banking regulator issued draft
rules to tighten supervision of entrusted loans, a kind of
shadow banking product.
The Securities Times newspaper said in a commentary on
Tuesday the moves by the CSRC and China Banking Regulatory
Commission paved the way for further monetary easing.
China's state-controlled securities media has a history of
being generally bullish about the stock markets.
Mainland stocks opened little changed on Tuesday.
The China market was one of the world's best performers in
2014, thanks to a surge of more than 40 percent in the last
quarter that was led by brokerages.
Monday's fall came a day before China reports fourth-quarter
and full-year economic growth data. The fourth-quarter is
forecast to have expanded at a 7.2 percent pace, the weakest
since the depths of the global financial crisis.
(Reporting by John Ruwitch; Editing by Richard Pullin and