Chinese stock market indices today: 1. CSI 1000: -8% 2. Star 50: -5% 3. Beijing 50: -4% 4. Shenzhen: -4% 5. Shanghai Composite: -3%
Meanwhile, the CSI 100 and Hong Kong 50 indices, which represent Chinese large caps, are UP on the day.
Chinese small cap stocks are collapsing while the large caps are completely unfazed.
What is happening to Chinese small cap stocks?
China has attempted multiple forms of stimulus to halt the decline in small caps.
Even with short selling bans and promises to stabilize markets, the CSI 1000 is under pressure.
Something is happening in China.
China's Plunge Protection Team has injected liquidity several times into their failing stock market only to be rejected each time.
After this morning's sharp fall, China derivatives have essentially been triggered 'knock-in'.
Only about 1.1 billion yuan worth of CSI 1,000 'Snowball' products remain untriggered, according to the data provided by securities institutions.
UPDATE 9:24 AM EST --
China has now placed new trading restrictions on domestic and foreign investors as the CSI 1000 index hits a 30% loss YTD.
New restrictions include:
1. Limiting investors' ability to short Hong Kong stocks
2. Some investors told that they are not allowed to sell their positions
3. Some quant funds are completely banned from placing sell orders
4. Other quants funds banned from cutting leveraged positions
