Chinese stocks plunge

The soaring Chinese stock market hit an air pocket on Wednesday. From AFP/CNA:

Chinese shares slumped 5.00 per cent on Wednesday as investors collected profits across the market after recent gains, with property developers leading the fall, dealers said.

The Shanghai Composite Index, which covers A and B shares, was down 171.94 points at 3,266.43 on turnover of 296.9 billion yuan (US$43.5 billion).

The sharp fall on Wednesday marked the biggest single-day percentage decline since November 18, when the index ended down 6.3 per cent. But the market has surged by about 80 per cent since the start of the year...

Meanwhile, concerns about slowing credit growth also weighed on sentiment, traders said.

China's two biggest lenders - Industrial and Commercial Bank of China and China Construction Bank - said they would sharply cut credit growth in the second half, Caijing Magazine reported Tuesday.

The broad-based decline in the market also came after a slew of profit warnings from China's blue-chip companies.

The plunge in China had little impact on trading in Europe, where the DJ Stoxx index rose 0.8 percent.

US stocks did close down though. Bloomberg reports:

The Standard & Poor’s 500 Index slipped 0.5 percent to 975.15 at 4 p.m. in New York. The Dow Jones Industrial Average fell 26 points, or 0.3 percent, to 9,070.72...

Treasury notes fell after a government auction of a record amount of notes drew higher-than-forecast yields for a second consecutive day, renewing concern a deluge of U.S. debt will overwhelm investor demand...

The dollar advanced the most against the currencies of six major U.S. trading partners in almost four weeks as stocks fell and crude oil slumped, bolstering demand for the greenback as a haven.

US economic data on Wednesday came in mixed, with durable goods orders down 2.5 percent in June but up 1.1 percent when transportation equipment is excluded.