China shares plunge, other global markets falter

Source: Associated Press

BEIJING (AP) -- Chinese stocks plunged Tuesday, snapping a months-long boom, and other global markets were lower on concern about feeble Chinese trade and Japan's recession.

KEEPING SCORE: France's CAC-40 fell 1 percent to 4,330.61 and Germany's DAX lost 0.8 percent to 9,934.17. Britain's FTSE 100 shed 1 percent to 6,603.34. Wall Street looked set for further declines. Futures for the Dow Jones industrial average and Standard & Poor's 500 both fell 0.3 percent. On Monday, the Dow fell 0.6 percent, the S&P lost 0.7 percent and the Nasdaq composite dropped 0.8 percent.

CHINESE MARKETS: Major Chinese oil and bank stocks fell, some by the daily limit of 10 percent allowed by regulators, as the market took a break from a buying frenzy that has pushed up the Shanghai benchmark by 41 percent since June. Investors had been driven by hopes for an economic rebound combined with outright cheerleading by the state press. But prices fell Tuesday after China's clearing house for securities trades raised the minimum rating for corporate bonds it would accept in exchange for short-term credit, prompting concern about the availability of financing for trades.

THE QUOTE: Hu Guopeng, an analyst at Founder Securities in Beijing, said the plunge in China's stock markets was a "technical correction" linked to the uncertainty about credit availability created by the change in collateral requirements. It "does not mean the end of the market boom," Hu said.



Read more: http://finance.yahoo.com/news/china-shares-plunge-other-global-095048274.html

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Uncertainty about credit availability ... sounds awfully familiar doesn't it?

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