China stocks fall after loan warning
26 January 2007
China's stocks fell after regulators told banks to enforce a ban on personal loans being used to buy stocks. The Shanghai Composite Index fell 3.96%, the Shenzhen Composite Index fell 4.28% and the Shanghai/Shenzhen 300 Index fell 3.3%. However, Reuters reported that China's stock rally was likely to continue because liquidity remained unaffected. Speculation of an imminent interest rate hike could also have caused the stocks to drop, according to the South China Morning Post.