China stocks bounce back as intervention restores stability

29-Jul (Reuters) — Chinese shares bounced back more than 3 percent on Wednesday, as Beijing’s latest efforts to prop up values restored a measure of stability to its unruly stock market.

After a dramatic plunge of more than 8 percent in Chinese stocks on Monday, China’s securities regulator announced probes into share “dumping” and pledged to buy stocks to calm the market, while the central bank hinted at more policy easing.

That followed moves in recent weeks in which the authorities temporarily banned shareholders with large stakes from exiting their positions and issued a string of warnings against short-selling, or betting on falls in its domestic “A-share” market.

“The possibility for A shares to rebound in the following month is quite big given liquidity is rich in the market now and short-selling ability has been largely curbed,” said Zhang Qi, an analyst at Haitong Securities in Shanghai.

[source]

PG View: Look at a chart, today’s rebound is hardly indicative of “stability”. I think Reuters is a little too optimistic with that headline.

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