Bears Take On The Bulls in China

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The markets have been having a rough ride lately. Could it be the end of the bull run in China? Is it simply that China is following other markets, or is it down to local news of new issues and sub-prime exposure?

China Herald comments:

    “Up to not so long ago China’s relative isolated financial markets caused movements at the stock exchange that often went directly opposite the global sentiments…Now, one of the suggestions is that today’s drop of over 5 percent was at least partly caused by the problems in the US-markets and the exposure of Chinese banks to the mortgage crisis and its fallout in the US, especially hitting China’s financial institutions.

    … The China Daily comes with another explanation that makes more sense in the Chinese context. It signalled panic selling after Ping An, China’s second largest insurer, announced plans to soak up 180 billion Rmb (€ 18 billion euro) with an additional share and bond offer. That is considered to be a bit too much, even for the enthusiastic Shanghai market. That now seems a crisis that is easier to contain than other crises stories.”

Whatever the explanation, it seems the bulls have stopped running blind, and are likely to be a bit more cautious in the China (stock) shop.

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