China stocks plummet 6.5% on margin tightening

Chinese mainland shares have plummeted 6.5% as investors took profits, as a fresh squeeze on margin financing was blamed for the latest blip in the country's fierce equity rally.

The Shanghai Composite index fell 6.5% to 4,620, ending a multi-day rally, as a number of brokerages said they were tightening requirements on the margin financing which has helped spur stocks' 2015 jump. Chinese mainland stocks had climbed over 50% year to date before today's fall, sparking concerns among investors the market is overheating and due a correction. Many Asian equity managers have been taking money out of Chinese A-shares and switching to less overvalued Hong Kong listed H-shares or Chinese stocks listed in the US. But today's slide in the mainland index also weighed ...