The market seems to be overshooting. The metal stocks are going crazy.

Profit-taking in many China stocks ... drove the market as well as H-shares into negative territory.

Overbuying of China stocks was obvious in the last two weeks. Investors are taking profits gradually, but some are still chasing laggards such as commodity stocks.

China-related stocks will likely to be hit by the austerity measures. I expect further correction in China stocks in the short term.

The market has corrected about 600 points from the high, so at this moment, the momentum has come back and there will be opportunity for a rebound.

The market just showed mild profit-taking in morning trade but the losses were limited. It turned higher in the afternoon as funds started buying blue chips such as China Mobile again.