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China Bears on Wrong End of $4 Trillion Rally Refuse to Go Away

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Bull markets are always tough on short sellers. This one in China right now, though, is proving downright brutal.

Bearish wagers on the Shanghai Stock Exchange have climbed more than threefold in the past nine months and reached a record 7.46 billion yuan ($1.2 billion) on Thursday, a period in which the benchmark equity index jumped 94 percent. Across the border in Hong Kong, where the Hang Seng Composite Index has surged 7.6 percent in just the past two days, the gauge’s 20 most-shorted stocks surged 18 percent on average.