China’s equity markets sold off in a volatile session, with the Shanghai Composite Index falling more than 2% before closing 1.25% lower at 3,547, while the SZSE Component Index lost 1.62% to close at 14,135. Investors were dealt with a slew of information, beginning with President Xi Jinping directing an investigation of state banks and other financial institutions’ ties with private firms alleging inappropriate dealings, adding to a large list of industries under fire from Beijing.

Heavy floods in Shanxi, China’s largest coal mining hub, also added strains to China’s coal mining industry which is already under immense pressure to ramp up production amid a power crisis in China. Meanwhile, property stocks advanced amid speculations of policy easing to support the troubled sector. Some investors are betting default risks in Chinese real estate have largely been priced in, offering attractive risk-reward opportunities in the sector.