Nikkei turns negative as Chinese stocks are dumped

After hitting 11 month highs earlier this morning the Nikkei has turned negative to finish the morning session down 0.4%. The Nikkei had soared ealier this morning, up over 2.2% at one stage in the wake of a historic victory by the opposition in Sunday’s national election. However, there was a dramatic sell off over the last hour, as the Chinese Composite opened down 1.5% and extended losses, down 4.5% at the moment.

Chinese stocks have been sold off heavily following Friday’s 2.9% sell off, as investor are still worried about the drop off in Chinese bank lending in August which in turn would trim liquidity flowing into stocks.