- Chinese stocks have closed down for the ninth consecutive session, the worst run since 1994, amid increasing fears of another cash crunch in the short-term money markets.
- The seven-day repurchase rate soared 100 bps to a six-month high of 7.6%, representing a jump of 328 bps this week.
- The spike came as borrowing remained difficult despite the People's Bank of China making an emergency cash injection in the financial system yesterday after being inactive for over two weeks. The PBOC didn't provide too many details, although the amount was reported to be 200B yuan ($32.9B).
- "Market participants have to be able to see it and know the quantity and tenor of liquidity assistance in order to be reassured," says HSBC's Pin Ru Tan. "If they do not, it is natural to remain cautious.
- The Shanghai composite fell 2% and the Hang Seng -0.2%.
- ETFs: FXI, PGJ, GXC, FXP, HAO, CYB, YINN, CNY, TAO, CHIQ, CHIX, MCHI, YANG, PEK, ASHR, CQQQ, XPP, QQQC, DSUM, YAO, CHXX, CHII, FXCH, CHXF, KWEB, ECNS, CHIE, YXI, CHIM, KFYP, FCA, TCHI, CHLC, CHNA