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China’s Stubborn Short Sellers Take on World’s Best Rally

The world-beating rebound in Chinese equities is failing to scare off short sellers.

The Hang Seng China Enterprises Index, which led declines among global equity gauges this year through March 20, has since rebounded 7.3 percent through yesterday for the world’s biggest gain. Traders who piled on bets against the iShares China Large-Cap exchange-traded fund during the rout have maintained those wagers even as stocks jumped. Short interest hit a record 29 percent of shares outstanding on March 24 before slipping back on March 26 to match its level before stocks began rallying, Markit data show.