The Chinese government is discovering it’s tough to control a roller coaster.

Asia Unhedged says the best thing to do is just hang on for the ride.

The Shanghai Stock Exchange Composite Index opened Wednesday’s trading session in a continuation of Tuesday’s 6% plunge. During the morning session, the benchmark sank more than 5%. But the afternoon saw the benchmark stage a stunning rebound to end the day up 1.2% at 3,794. The Shanghai Composite is off 27% from its June high.

The Shenzhen Stock Exchange Composite Index gained 2.2% to 2,222. (Is there some magical properties associated with the number 2? If so today might be a good day to get a lottery ticket.)

The Chinext Price Index, the benchmark for the small-capitalization market rose 2.7% to 2,571. However, the Hang Seng Index in Hong Kong fell 1.3% to 23,168. The Hang Seng is now down 1.8% for the year.

Tuesday’s decline, the biggest in three weeks, was based on worries about the economy. China’s rail freight volume, an indicator of economic activity, plunged 10.9% year over year to 278.89 million ton in July, pointing to plunging demand for major commodities, including coal and metals, according to data from the National Development and Reform Commission (NDRC), reported

For the first seven months of 2015, total freight dropped 10.2% to 1.98 billion tons, widening from a 10.1% drop for the first half, said NDRC.

Meanwhile, China’s Purchasing Managers’ Index (PMI) retreated to a five-month low of 50 in July, down from 50.2 in June. A reading above 50 indicates expansion, while a reading below that represents contraction.

Although data showing a stronger housing market would seem to be good news for the economy, the market sees the glass half empty because this lowers the chance of further fiscal stimulus from the government.

And while we haven’t seen any mention of it in the market commentary we’ve been reading, reports that last week’s explosions at the Chinese port of Tianjin could generate insurance losses between $1 billion and $1.5 billion could be preying on investors’ minds. Not to mention, Tianjin is the world’s third-largest port in terms of cargo volume. How will the loss of that port affect China’s economy this quarter and in the years ahead?

But investors might have been most concerned about last week’s reports that the China Securities Finance Corporation (CSF) — the state margin lender that was tasked with buying shares during the market slump — will reduce buying stocks as volatility falls.

Speculation that the government may begin to scale back its massive support for the stock market prompted investors to sell, especially after the rally of the last few weeks, Xun Yugen, a senior analyst with Haitong Securities, told Xinhua, the government’s official news agency, on Wednesday.

Step back a moment and take that in. Even the government is reporting that investor confidence has been shaken by reports that it may pull the rescue funds. On Friday, the CSF added that it would hold its shares and stabilize the market during dramatic fluctuations.

Well, with volatility rising, the word on the street is that government support is back in the game and flowed until the Shanghai Composite closed in the black.

Xinhua reported that the late-day rally was sparked by “speculation of fresh government support, including an expected reserve requirement ratio cut.”

We’re going to take that as confirmation.

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