Asian credit lost its status as a global safe haven last week, as the market slumped in response to a steep drop in Chinese equities and weakening Asian currencies on a day that Chinese media dubbed "Black Monday". A drop of 8.5% in the Shanghai share index on Monday was accompanied by Chinese asset managers dumping dollar bonds in the secondary market. The nature of the selling pointed to more serious systemic problems than in previous weeks, when private-bank clients offloaded shares and bonds to cover losses in the Chinese stock market.
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