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Chinese Stock Market Falls After Margin Trading Curb

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China’s main share index fell by the most since 2008 after authorities cracked down on margin trading, where investors borrow cash to buy shares.

The securities regulator punished top brokerages for illegal activities in their margin business, which had fuelled previous rallies.

The brokerages were banned from opening new margin trading accounts for three months, according to media reports.

The Shanghai Composite fell 7.7% or 260 points to close at 3,115.09.

At one point, the index had fallen by more than 8% during the afternoon trading session, with banking stocks among the worst-hit.

via BBC

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza

@alfonso_forex

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