After Tumbling At Open, Chinese Stocks Erase All Losses

It's a miracle...

SHANGHAI COMPOSITE INDEX SET TO OPEN DOWN 3% ... 20 Minutes later... SHANGHAI COMPOSITE INDEX ERASES LOSS, RISING 0.3%

— zerohedge (@zerohedge) January 5, 2016

"Someone" stepped in and bid the entire Chinese market higher off its huge opening gap down...

Despite the biggest liquidity injection (CNY130bn) in 4 months, it appears Kyle Bass' top trade remains well on target as Offshore Yuan plunges, underperforming Onshore Yuan despite the largest Fix devaluation in two months. In a word - it's chaos in Chinese markets. The Shanghai Composite looks to be opening down 3% - extending yesterday's losses (beyond the US session's ADR's move). What a mess.

First: PBOC devalues the Yuan fix by the most in 2 months...

Offshore Yuan continues to collapse and remains over 1000 pips cheap to onshore Yuan...

Despite the biggest liquidity injection in 4 months

The People’s Bank of China will inject 130b yuan into the banking system using 7-day reverse repurchase agreements today, according to two traders at primary dealers required to bid at the auctions.

Amount injected in operation today is most since Sept. 8

and all of this has left Chinese stocks plunging....

China better start arresting malicious sellers stat

— zerohedge (@zerohedge) January 5, 2016

Charts: Bloomberg

Comments

[Janet Shalom Be...]

That's how Asian markets work.  Destroy the economy, have the public dump stocks as you print trillions of new yuan/yen, then use the new wall paper to buy and hold stocks, giving the false impression that everything is ok.   

Really sound monetary policy.  The great experiment, where they think that the public will fully understand if things go horribly wrong.  

wait, that is exactly what the Fed is doing.    

Wouldn't want to be a central banker when these experiments horribly fail.     

[David Wooten]

Time for another Update! as it's plunging again @11:30MST

Down over 3% after rebounding to positive from open.

[FranSix]

This is not the stock market crash you were looking for /JEDI mind trick

[Goldbugger]

We have the PPT to buy, they have the One Hung Low.