Something Just Snapped Again In China - B-Shares Crash Most In 4 Months

Update: *SHANGHAI B-SHARE INDEX PLUNGES 7.8%

*SHANGHAI B-SHARE INDEX TUMBLES MOST IN FOUR MONTHS

As we detailed earlier...

We have seen this pattern before. In August, the first thing to tumble was Yuan FX rates, then money market rates exploded, and then the stock market tumbled. While it is a little premature, today's sudden plunge in Chinese stocks (as the afternoon session opens) following last week's spike in money market rates following the previous week's non-stop weakness in the Yuan does have a concerning smell of deja vu all over again.

 

Just as we saw in August, Yuan weakness was followed by sudden surge in money market rates (which was followed by a collapse in stocks)

(note - while we would expect some year-end window-dressing shenanigans in money-markets, the fact that 'panic' has not unspiked this time in 1 week HIBOR is concerning)

And that has been followed by a serious slide in Chinese stocks as the afternoon session opens...

 

The entire Chinese equity complex is being sold hard...

 

That was then...

 

And this is now...

 

Time to call The National Team... or is this the inevitable blowback from The Fed's liquidty withdrawal rippling through the illiquid links of a holiday-stymied global collateral chain?

US equity futures are below Christmas Eve's trading day lows (S&P 500 down 11 points from the late-day highs)

Charts: Bloomberg