China’s stock traders have been unwinding their leveraged positions over the past month, fuelling the worst-ever stock sell-off on one major index of technology shares and undermining Beijing’s efforts to put a floor on the equity market. The outstanding value of the stock purchases financed by margin trading stood at 2.59 trillion yuan (US$383.4 billion) on Friday, a decrease of 14 per cent from the record high of 3.01 trillion yuan on June 25, according to Chinese financial data provider Wind. The unravelling of the trade was concentrated in the stocks trading on the Shanghai and Shenzhen exchanges under their respective tech boards. “Investors’ exiting their leveraged positions largely explains the big decline in the market, particularly technology and AI stocks, though little has changed in the fundamentals,” said Wang Chen, a partner at Xufunds Investment Management in Shanghai. “AI stock swings overseas both provoked and accelerated the deleveraging here.”