Upon the return from the Golden Week holiday, Chinese equities are finding it tough to sustain the optimism before that. It’s been a continuous back and forth battle in trying to push for gains but ultimately, there looks to be some exhaustion – at least for now. The CSI 300 index ends lower by 2.7% today and is down over 13% from the opening high on 8 October.
CSI 300 index daily chart
It’s been a bumpy road over the past week and things may not get much smoother unless there is further help from Beijing.
The situation now is the same as it is yesterday as described here. Investors are looking to hold on to hope and it will do them a world of comfort if Chinese officials follow through on their messaging from before the holidays.
“One can fathom Beijing’s intentions to pump up sentiment ahead of the biggest holiday in the country and to get people buzzing and feeling good about the government’s promises. But there needs to be some follow through and not just a “pump and dump” to mask the underlying economic situation.
And Saturday’s preach for patience amid a lack of details is not quite the follow through that was hoped for.
That being said, Chinese investors seem to be holding on to hope still with stocks up to open this week. But is it a matter of time before they turn their backs on Beijing again like all the other times in the past two years?”