Chris Weston, Chief Market Strategist at IG Markets
Traders are getting used to extreme volatility in Chinese equities and there are signs that the Chinese authorities are becoming increasingly worried by the pace of the sell-off.
It is clear that there is a massive deleveraging exercise underway after traders amassed RMB2.26 trillion of margin debt by 18 June. This figure currently stands at RMB1.77, some 22% lower, with declines seen for 11 consecutive days. Naturally, part of the moves has been caused by forced selling as traders face margin calls, but part of the move would be caused by raw emotion as panic and fear impact traders psyche.