However, indexes throughout the balance of the region fell, and some sharply. The Hang Seng plunged 3.18%. Japan’s Nikkei was down 2.08%.
It is hard to determine whether the year-long run up was due to huge levels of loans that have allowed China investors into the market, or whether individual investors wanted to take advantage of a bull market. It is probably both, since margin permitted many small investors to jump into a market, which many now have to jump out of to repay loans based on stock prices. Markets in total had fallen more than 8% in two weeks before today.
Another factor in the drop of the Chinese markets is that the world’s second largest economy has slowed considerably and that this will affect the profits of Chinese companies.
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