Jun
21

China Margin Debt Shrinks First Time in a Month Amid Stock Rout

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Chinese stock investors reduced leveraged positions in Shanghai for the first time in a month as the benchmark equity index plunged.

The outstanding amount of margin debt on the Shanghai Stock Exchange fell to 1.479 trillion yuan ($238 billion) on Friday from a record 1.483 trillion yuan the previous day, the first decline since May 22. Shares sank 6.4 percent Friday to cap their worst weeksince the global financial crisis in 2008.

A pullback by margin traders would undercut one of the biggest drivers of the rally that’s lifted the Shanghai Composite Index up 121 percent in the past 12 months. Most of this year’s biggest declines in the gauge, including a 6.5 percent slump on May 28, were sparked by investor concerns over margin-trading restrictions. The regulator announced plans June 12 to limit the amount brokerages can lend for stock trading…

China Margin Debt Shrinks First Time in a Month Amid Stock Rout

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