A journalist from one of China’s leading financial magazines has been paraded on state television to make an on-air “confession” for supposedly triggering stock market chaos with his reporting.

Wang Xiaolu, a business reporter for Caijing, was detained last Tuesday after writing a story that claimed China’s securities regulator was pondering ending interventions aimed at stabilising the stock market.

The story, which was published on 20 July, came at a highly sensitive time.

Weeks of stock market turmoil have sent political shockwaves coursing through Beijing, with some now openly questioning the future of the prime minister, Li Keqiang, and others attacking President Xi Jinping’s botched handling of the financial debacle.

The market in chaos in China led to stock market sell-offs around the world. In Europe markets suffered their worst month in four years in August, with the continent-wide FTSEurofirst 300 index down 9%.

The Dax in Germany lost another 0.4% on Monday, with France’s Cac off 0.5%. The Dax fell by 9% in August while the FTSE 100, which was closed for the August bank holiday on Monday, lost 6.7% in the month.

A visibly tired Wang apologised for his story in a confession that aired on Monday morning on the state broadcaster CCTV.

“I shouldn’t have published the report at such a sensitive time, especially when it could have great adverse impact on the market,” he said. “I shouldn’t have caused our country and shareholders such great losses just for the sake of sensationalism and eye-catchiness.

“I’m regretful of what I have done and am willing to confess my crime. I hope the judicial authorities will give me a chance and handle me leniently,” Wang added.

China’s official news agency, Xinhua, announced that Wang had been placed under “criminal compulsory measures” on Sunday. The journalist was suspected of “colluding with others and fabricating and spreading fake information on securities and futures market,” Xinhua reported.

Wang admitted basing his report “on hearsay and his own subjective guesses without conducting due verifications”, Xinhua added.

In recent years activists have expressed extreme discomfort at the growing number of people being paraded on Chinese television to make such so-called confessions.

Those made to broadcast such statements include Gao Yu, a veteran journalist jailed in April for leaking an internal Communist party document, Charles Xue, a venture capitalist and blogger, and Peter Humphrey, a British private investigator who was released from prison in June after nearly two years behind bars.

Speaking earlier this month, Eva Pils, an expert in Chinese law at King’s College London, said so-called televised confessions were being used more and more against government critics including human rights activists, journalists and lawyers.

“I have heard previously of people being forced to make statements in front of a camera without that later being shown,” Pils said. “But I think that now clearly … they have also tried to get these filmed confessions and to broadcast them.

“I think this is a sort of trademark Xi Jinping thing,” she added.

The broadcast of Wang’s words sparked outrage among Chinese journalists and media watchers.

“The authorities want to use the television confession as a means of censorship,” said Qiao Mu, an outspoken journalist professor from Beijing’s Foreign Studies University.

“This is essentially a political issue – authorities want to find a scapegoat for the stock market upheaval.”

David Bandurski from the University of Hong Kong’s China Media Project told the Financial Times: “This isn’t about the factual nature of his reporting, it’s about the political impact. This looks like a vendetta.”

A statement published on the website of Reporters Without Borders called for Wang’s immediate release. “Suggesting that a business journalist was responsible for the spectacular fall in share prices is a denial of reality,” said Christophe Deloire, the group’s secretary general. “Blaming the stock market crisis on a lone reporter is beyond absurd.”

China’s stock market calamity has been splashed over newspaper front pages from Delhi to Dubai but Beijing’s powerful propaganda department has forced its own media to all but ignore it.

A leaked government propaganda directive from July said: “Do not conduct in-depth analysis, and do not speculate on or assess the direction of the market. Do not exaggerate panic or sadness. Do not use emotionally charged words such as slump, spike or collapse.”