Chinese Stocks Enter Bear Market Following 2 More Defaults Overnight
Following the default of 2 more corporations last night, Hang Seng’s index of China Enterprises plunged to 8-month lows and officially entered bear market territory. 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 copper giving back most of yesterday’s major short squeeze gains back. 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,