By Samuel Shen, Rae Wee and Qiaoyi Li
SINGAPORE/SHANGHAI (Reuters) -China’s investors borrowed a record $322 billion to buy stocks this year, but sharp corrections this week and heightened regulatory scrutiny to cool overheated markets are now making them jittery about the leveraged bets.
While risks for China’s broader financial system have been elevated for months due to deflation in the economy and a persistent property debt crisis, the stock investors’ recent actions could add more pressure.
Outstanding margin financing in China, a key gauge of sentiment and leverage level, hit a record 2.3 trillion yuan ($321.55 billion) this week. And some speculators are diverting consumer loans to stock trading.
Those helped Shanghai stocks hit 10-year highs last week in a liquidity-driven rally despite a weak economy and simmering trade and geopolitical tensions.
But China’s blue-chip CSI300 Index slumped 2% on Thursday after Bloomberg…
