Chinese stocks are tanking.

The Shanghai Composite is currently down more than 4% with rumours surrounding tougher margin requirements from brokerage firms, along with concerns about lower liquidity ahead of a raft of new IPOs, seeing losses accelerate late in trade.

If sustained, the loss would be the largest daily decline in percentage terms seen since January 19 this year.

The losses are also impacting trade in Hong Kong with the Hang Seng currently off 1.6%.

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