Today's Major Market Move - Chinese Stock Markets Down Over 3% in One Day

The Chinese equity markets were down significantly in Monday's trading session, with the ChiNext Price Index being one of the biggest decliners at down 4%.


Click on the image for a larger view.Click here to go to the current chart.
We had last mentioned the ChiNext Price Index on June 25:

Of the Chinese equity indexes we track on PikeFin, the worst performer for 2011 is the ChiNext Price Index at -18.4%. The ChiNext index is a listing of high growth companies (i.e. high risk) based in Shenzhen. According to this article on Want China Times, it's barely over a year old and is down over 15% since its inception (it hit 986 on opening day 6/1/2010 and the most recent print was 832).

Since that mention, the ChiNext Index in particular, and Chinese equity markets in general, had rebounded nicely. Part of the rebound was due to the boost that stock markets around the globe received at the news of another Greek bailout. Here is a chart of the % gains of 3 Chinese equity indexes along with the USDCNY (US $ / Chinese Yuan cross in blue):


Click on the image for a larger view.Click here to go to the current chart.
There are several issues facing Chinese markets in the near future: a potential popping of the real estate bubble, rising commodity prices (which we've talked about here) and a slow down in the U.S. as a result of reigned-in government spending.