China Stocks Plunge to the Brink of a Bear Market

26-Jun (Wall Street Journal) — A Chinese stock market slump that began two weeks ago deepened, with the main index tumbling on concerns the government is seeking to cool a yearlong debt-fueled rally.

The Shanghai Composite Index fell 7.4% Friday to 4192.87. The index is off 19% since a June 12 high, a decline that has wiped off $1.25 trillion in market capitalization, an amount roughly equal to the size of Mexico’s economy.

…“There’s widespread panic today and some of my friends got margin calls and were forced to sell their stocks at deep losses. There was too much leverage in this market and it’s crazy,” said Yunfeng Wu, an investor in Shanghai.

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