Chinese correction

The Chinese Correction was the global stock market plunge of February 27, 2007 which wiped out hundreds of billions of market value. [ [http://www.foxnews.com/story/0,2933,254905,00.html FOXNews.com - Wall Street Slammed After China Stock Woes - World Market Analysis | Financial News | Market Data | Stock Market News ] ] After rumors that governmental Chinese economic authorities were going to raise interest rates in an attempt to curb inflation and that they planned to clamp down on speculative trading with borrowed money, the SSE Composite Index of the Shanghai Stock Exchange tumbled 9%, the largest drop in 10 years. [ [http://www.forbes.com/home/markets/2007/02/27/china-shanghai-update-markets-emerge-cx_jc_vk_0227markets15.html Black Tuesday In China - Forbes.com ] ]

The plunge in Asian markets sent ripples through the global market as the world reacted to the 9% meltdown in the Chinese stock market. [ [http://news.xinhuanet.com/english/2007-02/27/content_5780066.htm Xinhua - English ] ] The Chinese Correction triggered drops and major unease in nearly all financial markets around the world. [ [http://news.bbc.co.uk/1/hi/business/6399941.stm BBC NEWS | Business | Share sale knocks Chinese market ] ]

After the Chinese market drop, the Dow Jones Industrial Average in the United States dropped 416 points, or 3.29% from 12,632 to 12,216 amid fears for growth prospects, then the biggest one-day slide since the September 11, 2001 terrorist attacks. The S&P 500 saw a comparable 3.45% slide. Sell orders were made so fast that a second analysis computer had to be used, causing an instantaneous 200 point drop at one point in the Dow Industrials. [ [http://today.reuters.com/news/articlenews.aspx?type=topNews&storyID=2007-02-27T214432Z_01_N26326120_RTRUKOC_0_US-MARKETS-STOCKS.xml&WTmodLoc=NewsHome-C1-topNews-2] Dead link|date=May 2008]

Rumors circulated around the world that the drop may have been due to an erroneous trade, but this was never confirmed.

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