Asian Markets Largely Unaffected By China Plunge

Chinese stocks took another sharp hit yesterday but the global stock markets and the exchange-traded funds that track them have again taken the sell-off in stride. According to Barchart, China's Shanghai & Shenzhen 300 index closed -7.69% but the Nikkei index yesterday closed slightly higher by +0.08% and the Hang Seng closed +0.62%. South Korea rallied +1.44% and Singapore rallied +0.87%.

The Chinese stock market has now fallen by 16% from its May 29 peak, with the Chinese government greasing the skids with its recent hike in the stamp tax on securities trading to +0.3% from +0.1%. The stamp tax hike illustrated that the government was looking for ways to take the air out of the stock market, which also suggested that the government will not provide any support.

It appears so far that the global marketplace is nonplussed by the China market adjustment with wide consensus that it was overvalued. Ironically, it may be that the "H" share markets will be a beneficiary, not a casualty, of the expected drop in China "A" shares available to Chinese only.