Shanghai stocks soared Wednesday on speculation that the Chinese government was considering a fiscal stimulus package, triggering a recovery across the region.
The Shanghai Composite jumped 5.9% to 2,482.64, adding on to its 1.1% advance Tuesday, while the Shenzhen All Share index soared 6% to 705.
The gains came after Chinese vice-premier Li Keqiang said Tuesday that there was a need to increase household incomes and rural consumption, to cope with a weakening global economy, according to reports.
Separately, J.P. Morgan analyst Frank Gong wrote in a report Tuesday that the country's top leadership was "carefully considering an economic stimulus package" of at least 200 billion to 400 billion yuan ($29 billion to $58 billion), which could be in the form of tax cuts and aimed at stabilizing the stock markets and supporting the development of the housing markets.
But some analysts were skeptical that the market gains could be sustained.
In Hong Kong, the Hang Seng China Enterprises climbed 3.7% to 11,106.55, while the benchmark Hang Seng Index rose 1.9% to 20,864.38.
"I think it's just a technical bounce and the trend is still downward," said Linus Yip, strategist at First Shanghai Securities in Hong Kong. "I think a stimulus package won't be able to give an instant boost to the Chinese economy, which is passing through a difficult time," he added.
The surge in Shanghai helped stocks elsewhere stage a rebound from early lows.
No comments:
Post a Comment