Wednesday newspaper round-up: China, Twitter, hedge funds

China is to extend a ban on stock sales by large shareholders until permanent rules to restrict such sales take effect, as authorities seek to calm market fears over the lock-up that was due to expire on Friday. China's blue-chip stock index, the CSI 300, tumbled 7 per cent on Monday, raising the spectre of a return to the panic selling of last summer when the main index was down 45 per cent at one stage. Analysts blamed Monday’s fall on fears over the impending end of the ban, which was imposed in early July. – Financial Times

Twitter is considering abandoning its 140-character limit on the length of tweets, as chief executive Jack Dorsey plays with ways to revive user growth at the messaging platform. Shares fell 3 per cent to $21.89 after a report that Twitter was working on extending the length of a tweet to up to 10,000 characters, with investors unsure about how this would change the social site. – Financial Times

Princess Yachts, Britain's largest boatbuilder, is cutting hundreds of jobs as the global economy continues to struggle. The Plymouth-based business will make 350 of its 2,300 workers redundant, with job losses expected to come in March. The timing of the news is unfortunate for the business, coming just days before the the start of the London Boat Show, where Princess will be the largest exhibitor. – Telegraph

Global stock markets could suffer further turmoil if China's slowdown continues, the International Monetary Fund's chief economist has warned. Markets across the world slumped on Monday, with the FTSE 100 recording its worst start to a year since 2000, after weak economic data from the Asian country. Maurice Obstfeld, who joined the IMF in September, said that further disappointing data from China could cause markets to fall again. – Telegraph

A collection of hedge funds have lost more than £30m in a single afternoon after shares in Home Retail Group, the owner of Argos and Homebase, rose on the news that Sainsbury’s had made a takeover approach. Hedge funds have bet heavily against Home Retail by shorting the shares, gambling that Argos will come under pressure from Amazon and fierce competition on the high street. – Guardian

A key lieutenant to Angela Merkel has claimed that the US government’s multibillion-dollar legal action against Volkswagen is aimed at destabilising the German carmaker in favour of American rivals. – The Times

Revelling in its new-found feelgood factor of rising wages and falling prices, Britain appears to have rediscovered a taste for enjoying itself. After enduring a decade-long slump, the entertainment sector has bounced back to deliver a record high in sales. Moreover, it appears to have reached a point where people are happy to pay for content — a Shangri-La for music and film companies that have long battled piracy and an anarchic online marketplace. – The Times