June 10, 2008
China Shares Nosedive
Chinese stock prices collapsed June 10 with the worst showing since the February 2007 pop of the bull run. Chinese financials, banks specifically, were hard hit and the spin on the crash is that markets are nervous about inflation and Beijing's action to raise, for the 5th time in a year, the reserve ratio requirement for banks. But the reserve hike was expected and only the timing could be a surprise. So was the recent improvement just a bear market rally?
Some numbers: benchmark Shanghai Composite closed June 10 just above 3,000 at 3,072.33 down 7.73% back to the level of last spring - CSI 300 Index sank over 8% - and B shares are down almost 7.5% in Shanghai losing almost all of their recent gain - ShenZhen Bs mirror Shanghai's bad performance.
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