The Shanghai Composite has closed down 7.7% this morning, its biggest loss in over six years, after a crackdown on margin lending at domestic brokerages.
The index, which rose 40% in the past quarter, slumped after Friday's decision by the China Securities Regulatory Commission (CSRC) to ban three brokerages from opening new margin trading accounts for the next three months. It follows an investigation by the CSRC into margin trading, a leverage-based strategy which has helped push domestic stocks higher in further months. The Shanghai Composite closed down 7.7% at 3,116, its largest one-day fall since June 2008. The index remains 55% higher on a one-year view. Separately, expectations of further monetary stimulus have prompted mana...
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