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ChineseStocksEnterBearMarketFollowing 2 More DefaultsOvernight
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Following the defaultof 2 more corporationslastnight, HangSeng’sindexof China Enterprisesplungedto 8-monthlowsandofficiallyenteredbearmarketterritory. Overnight angst in the Chinese currency markets (which saw the Yuan trade back to 1-year lows) has sparked broad commodity weakness (as CCFD unwinds en masse) with coppergivingbackmostofyesterday’smajorshortsqueezegainsback. Chinese corporate bond prices also tumbled to one-month lows.
Hang Seng’s China Enterprise Index (the most liquid vehicle for trading Chinese stocks for foreigners) has entered a bear market
as cash-for-commodity financing deals continue the unwind,
Charts: Bloomberg
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