China to Take Down World Financial Markets

[Jikx]

Hence, as we're seeing, each time the Chinese market falls significantly we only catch a very small dose of a cold, definitely not the flu.

Sounds to me that we've reached the "insanity" stage of the bubble. That bubble in China will burst. It has to, there's nothing "backing" the value, even sound minders are getting in the act, and that's definitely a sign to get out.

Where we go from there.. I'm not sure. How much foreign money is invest in those markets? How bad will the rush out become? Will the crash of the Chinese market cause the Chinese economy to blow? A drop off in the massive amounts of cash flowing out of China will spell doom for the US and Australia.

Let's hope the Chinese government lets the air out slowly.

 

[nizar]

and that's definitely a sign to get out.

Then get out bro. Many buyers there for your stock.

Recent research shows that only 16% of the Australian public have 16% of their savings in Stocks. Back in the peak of tech boom, it was 35%.

Punters are still cautious. We have yet to see the irrational exuberance phase yet where all the punters 4get about tech boom and think "its different this time". Valuations are still rational in the markets, especially with the bigger miners.

This is the most profitable time to be in the market. (and the most risky??).
But you know what they say, if you cant stand the heat then get out of the oven.

THis report by Dr.Oliver, Chief economist at AMP is a good read and fairly accurate representation of whats happening at the moment (in my opinion).

http://www.ampcapital.com.au/K2DOCS...4E81-429D-8D3D-2E0C2C0444B7/OINo16.pdf?DIRECT

And like iv always maintained, we have NO PROOF/EVIDENCE that we or any global equity markets will follow China. We certainly didnt follow them on the way up.

 

[Kimosabi]

Recent research shows that only 16% of the Australian public have 16% of their savings in Stocks. Back in the peak of tech boom, it was 35%.

I suspect this figure probably doesn't include super.

I was listening to an interview on the ABC last week, with a guy that has written a book about China, and an interesting point that he made is that much of the expansion/industrialisation of China has been funded by Savings of the Chinese Peasants, of whioch there is about 800,000,000.

 

[nizar]

Yeh well in as of last week i read that the number of broking accounts in China reached 100million.

Thats roughly the number of their middle class.

Now when the peasants start buying in....... thats when its gonna get interesting.....

 

[ta2693]

Ohhhh, this is so true here from a Chinese's point of view here as well. (though living in Aus for too long)

Creating wealth is like....OUR PURPOSE FOR LIVING, and SAVING FACE is definitely one of our custom. We "naturally" do WHATEVER it takes to create wealth, even if it means indirectly harming someone else in the process. A little off topic.

However, I would say the same human psychology of fearing to lose by rapidly selling if the situation becomes untenable will still occur. How much more drop before we see massive selling? I have no idea...

Do not be ironic. creating wealth is human being. not only Chinese. We human being do whatever it takes to create wealth, even if it would harm someone else in process, as long as we would not be hurt in the future.

 

[nizar]

Just a question.

If China has a 20-30% correction (i would call this a crash as its >10%), will the index be bought up again or will CHinese people just lose faith in the markets and go back to savings accounts??

COz i suspect if we get a prolonged spell of weakness everybody will just run for the exits no doubt, but will they be back?

 

[ta2693]

People have taken Chinese share market too seriously. Indeed, the share market has little relevance to the overall economic development and trend in China.

Share market has been in China only less than two decades. Due to the untransparency and immature accounting and auditing systems, the listed companies rarely provide authentic information to public. The market has been used by comany onwers to get funds for expansion while take little accountability and responsibility for the operation of the companies. It's currently still a largely speculative market where fund managers and big players manipulate the market to profit.

Of course in the long run, the market will be more efficient and will be play a more substantial role in the national economy, but currently it provides little function as indication for the total economy performance.

You are right, I can not agree with you more.

 

[ta2693]

Just a question.

If China has a 20-30% correction (i would call this a crash as its >10%), will the index be bought up again or will CHinese people just lose faith in the markets and go back to savings accounts??

COz i suspect if we get a prolonged spell of weakness everybody will just run for the exits no doubt, but will they be back?

Let me rephrase your question. if dad and mum lose 20-30% of their wealth in a
week, will they come to the market and play again?
My answer is no. If they are burnt, they will remember and will not come to market again at least in five years.

 

[ta2693]

China doesn't drive markets though.

Countries like USA and europe which are huge consumers drive the demand, china simply makes the stuff. Its not like the factories will close if the market goes down?

With consumer sentiment still high around the world what is the worst that could happen?

Alot of ordinary chinese stand to loose money but if you've been to star city and time lately you'll know that they'll just move onto the next table and try again.

:

They are gamblers in star city, i.e. high risk profile. They are pretty much different from dad and mum investor (low risk profile) in Chinese market right now.

 

[Kauri]

Shanghai down a fair whack again today... so far... will it pull up as a minor double bottom or keep heading south... may take a bit of the sting out of our market??....

 

[eMark]

Shanghai down a fair whack again today... so far... will it pull up as a minor double bottom or keep heading south... may take a bit of the sting out of our market??....

I for one am pleased to see it continue to fall; albiet preferably a few % at a time. You do not want to see it lose 10-12% + on a single day again....... I think the world markets are getting used to seeing China fall a little at a time. Our market today has come back some from it's highs, but hasn't given up all gains.

At time of post

3,750.51
- 253.48 (6.34%)

 

[Kauri]

I for one am pleased to see it continue to fall; albiet preferably a few % at a time. You do not want to see it lose 10-12% + on a single day again....... I think the world markets are getting used to seeing China fall a little at a time. Our market today has come back some from it's highs, but hasn't given up all gains.

At time of post

3,750.51
- 253.48 (6.34%)

At its best today she was down the best part of 15% from her recent highs.... and all due to a 0.2% increase in stamp duty tax....
Wonder if the media over there is like ours.. market drops due to profit-takers.. and when it recovers it's down to bargain hunters... ???

 

[dubiousinfo]

Down 16% from its highs over the last 5 days. Anyone like to venture where support might be??

 

[toothfairy]

Why would anyone here, or anywhere including China worry about the recent 15% or so reduction in the Chinese stock market? Heaps of people there have made a lot of $ from it already, a few has to lose. Really good to see a so called communist country has such free market spirit. A few people may commit suicide, but that's the price to pay for freedom to choose.

 

[Uncle Festivus]

Just a question.

If China has a 20-30% correction (i would call this a crash as its >10%), will the index be bought up again or will CHinese people just lose faith in the markets and go back to savings accounts??

COz i suspect if we get a prolonged spell of weakness everybody will just run for the exits no doubt, but will they be back?

Good question. The Chinese government has also said they plan to eliminate the 20% tax on interest income too, so there may be momentum building for profit taking and back into savings.

This could also build into a self perpetuating correction if it gets hold over a number of day's, as it appears to be doing. Where it stops nobody knows. Isn't that what they say at the roulette wheel, or is it the merry go round?

Breathless update 1 - Shanghai down nearly 6% as well, after yesterdays 8% plus pullback.

 

[barnz2k]

down another 5% or so today?

Indexes Prev. Closing Last High Low Change%
SSE 180 8290.53 7857.96 8215.61 7852.63 -5.22
SSE 50 2877.80 2745.97 2860.10 2743.42 -4.58
SSE Composite 3816.17 3615.87 3778.40 3614.53 -5.25
SSE New Composite 3238.11 3067.14 3207.10 3065.99 -5.28
SSE Dividend 3199.80 2989.25 3158.49 2982.17 -6.58
SSE A Share 4005.20 3794.38 3965.60 3792.98 -5.26
SSE B Share 254.78 246.55 253.43 246.02 -3.23
SSE Fund 3445.84 3281.75 3401.57 3277.08 -4.76
SSE Government Bond 109.85 109.88 109.88 109.83 0.03
SSE Corporate Bond 117.73 117.92 118.20 117.28 0.16

 

[>Apocalypto<]

down another 5% or so today?

Indexes Prev. Closing Last High Low Change%
SSE 180 8290.53 7857.96 8215.61 7852.63 -5.22
SSE 50 2877.80 2745.97 2860.10 2743.42 -4.58
SSE Composite 3816.17 3615.87 3778.40 3614.53 -5.25
SSE New Composite 3238.11 3067.14 3207.10 3065.99 -5.28
SSE Dividend 3199.80 2989.25 3158.49 2982.17 -6.58
SSE A Share 4005.20 3794.38 3965.60 3792.98 -5.26
SSE B Share 254.78 246.55 253.43 246.02 -3.23
SSE Fund 3445.84 3281.75 3401.57 3277.08 -4.76
SSE Government Bond 109.85 109.88 109.88 109.83 0.03
SSE Corporate Bond 117.73 117.92 118.20 117.28 0.16

Thank you for posting that, hey people wake up!

China is in a short term down trend for 2 weeks! where is all your concern?

I look at the chart every afternoon.

So where are you china crash experts? This could be the start of it! LOL you are only here when it makes the news cuz it falls 8% -10%

Now china as you see in the chart (SSE 180 INDEX) below china is in a short term down trend and are we??? Case closed. Alot of hot air and smoke and mirrors in here!

 

[bean]

I have been following the composite closed yesterday 3615
What I have noticed is that it only has two days down in a row before a bouce of a couple of days.
Yesterday was it second day down so today up?
Its 100 day moving average is 3525
So a testand a bounce from that today?

 

[Santob]

This posting relates more to Hong Kong (Where I am currently) but does mention the reason for the drop yesterday.

2007-7-5 04:36:00 p.m. HKT, XFNA
Hong Kong shares close firmer as QDII news fuels hopes for more fund inflows



HONG KONG (XFN-ASIA) - Share prices closed firmer, with the main index at a new high, as news of China's plan to allow more investments overseas by qualified financial institutions triggered hopes or more fund inflows into Hong Kong.

China's state media reported that the State Administration of Foreign Exchange plans to raise investment quotas under the country's Qualified Domestic Institutional Investor (QDII) program and will release revised rules soon on insurance firms' investments in overseas markets.

Meanwhile, the China Securities Regulatory Commission is said to have started reviewing applications of mainland brokerages and fund managers seeking to invest client funds in overseas securities.

LINK

 

[>Apocalypto<]

I have been following the composite closed yesterday 3615
What I have noticed is that it only has two days down in a row before a bouce of a couple of days.
Yesterday was it second day down so today up?
Its 100 day moving average is 3525
So a testand a bounce from that today?

Bean those patterns are random i would not try to trade off them unless they appear 3 times out of 4 weeks what you are seeing is minor rallies in a selling move common as sliced bread.

i really suggest you start using charts I know what your trying to do with prices codes to see pattern and pivots points in price. I give u credit for trying but Bean u anit no Jesse Livermore there is a big tip for u if thats the type of trading system u are trying to develop! Get reading on how to trade in stocks! another tip.