China’s stocks crashed 3.3% to enter bear market territory. Monday’s loss has the Shanghai Composite down 22% from its June 12 high.
Monday’s session was particularly volatile as stocks opened to a gain of 2.5% after the People’s Bank of China cut its key lending rate 25 basis points to 4.85% on Saturday. However, heavy selling developed early in the session, and the Shanghai Composite collapsed to a loss of 7.5%. A strong wave of buying erased almost all of the losses before late selling pressured trade into the close.