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Saturday, 27 June 2015

Thwack

China stock plunge

When I mentioned on Thursday that the China stock bubble would "end in tears" I was somewhat casually referring to market risk in an open-ended sense.

In truth, I hadn't supposed that the market would be diving so sharply within a few days.

Yet with another 7.4 per cent plunge the market is quickly heading into correction territory, down by around 19 per cent in just over a fortnight.


I'm not a close follower of China stocks, to be sure, but stock markets have been trading at some breathtaking valuations, and when there are both margin debt and a high volume of inexperienced investors involved, markets can unravel fast.

This will be a very interesting one to watch over the next few weeks.