Trouble in Asian Equity? China Raises Interest Rates, Again

Some news out of China yesterday. They are raising interest rates for, if memory serves me, the third time in the past year, in addition to having raised reserve requirements five times.

That should put a notch in the economy over there, even though there's the accompanying statement that still labels the stance as accommodative.

What's the natural reaction to this going to be? Probably some selling in Asia's equities markets.

Below is a chart with all of Asia's equities markets compared to the S&P 500, both without and with the SSE (Shanghai Stock Exchange).

click to enlarge

It seems the world is becoming intent on drying up some liquidity. All except Japan, of course. You'll remember that it was China's markets that rocked the equities markets around the world just a few days ago. Let's see if they have the same effect today.