Tuesday, August 25, 2015

Chinese Shanghai Stock Index broke below 3,000pt and PBOC cut thepolicy rate and RRR in the evening

Chinese Shanghai stock index fall -7.63% today, following more than 8% yesterday, and broke below 3,000pt at most. And then, in the evening, just before, PBOC announced cut the policy rate by 25bp, its lending rate for 1 year from 4.85% to 4.6% and RRR by 50bp.

It seems the fear perfectly ruled the market in China. In contrary, other Asian equity markets showed rebound today despite panic sells in China. S&P500 futures rebound about 4% following tumbled about -4% yesterday.

What does it mean? Merely, temporary and technical movement under big trend market toward downside? or, in fact, is not there the financial crisis in China?

In monthly candle in SHCOMP index, the price seems to rebound soon underpinned by the positive cloud... It means, at least, in short term, stock index could upturn for next few months... And, this will be possible, unless current problem in China does not transfer to financial crisis...





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