Some Asian markets on Monday declined less than anticipated in response to Sunday's Greek No vote. It may be because the Chinese market was being propped up. Per USAToday:
On Saturday, China’s 21 largest brokerage firms said they would spend a whopping 120 billion yuan (about $19.3 billion) to try to stabilize the market, according to Chinese state media. The firms will actually buy stock funds themselves.The Economist had this to say about the situation:
The goal is to show regular mom and pop investors that the big players still think buying stocks is a good idea. It’s a similar strategy to companies buying back their stock when they think it’s undervalued.
The crash has underlined the burgeoning role of debt in Chinese share-trading. Goldman Sachs reckons outstanding margin financing, at 2.2 trillion yuan ($355 billion) earlier this week, was the equivalent of 12% of the value of all freely traded shares on the market, or 3.5% of China’s GDP. Both “are easily the highest in the history of global equity markets,” its analysts noted. With Chinese shadow banks and peer-to-peer lenders also offering cash to investors, the amount of hidden leverage in the market is estimated to be as much as 50% higher. That debt helped fuel the initial rally. It is now adding to the pain, as leveraged investors rush to sell their holdings to cover their debts.