Shanghai Stock Market

Asian stocks are weak today (Wed AM). Hong Kong is down a little, but Shanghai is down 1% bringing the index near 3K. Shanghai banks are down 4% today, their reserve requirements were just raised. Inflation is causing big problems for China. Fuel is subsidized, food is the largest component & it affects everybody. The chart below shows the last 12 months for their stock market. It almost doubled last year, but those gains were given up in the last 8 months. The rebound in recent months was lost in May, the index sunk back to 3K (more than 50% below its recent high). China sells a lot to the US, their stock market weakness may be another drag on US stock markets.