Business

China’s Stock Market Rally Stalls After Disappointing Economic Announcement

A stock market rally in China has fizzled out as a highly anticipated announcement on plans to boost the country’s ailing economy disappointed investors.

Shares had jumped by more than 10% as trading restarted after the Golden Week holiday but fell back after a news conference by the country’s economic planners.

In a volatile session, the Shanghai Composite Index in mainland China was up by around 5% in late morning trade, while the Hang Seng in Hong Kong was 5% lower.

Investors had been hoping for more information about how the government plans to support economic growth but the announcement gave little in the way of details.

The chairman of China’s National Development and Reform Commission Zheng Shanjie said he is “fully confident”the country will achieve its full-year economic and social goals.

He added that,the downward pressures on China’s economy is also increasing.”

Mr Zheng’s comments came as he announced that China will issue 200 billion yuan ($28bn ,£21.5bn) for spending and investment projects by the end of this year.

“The market really expected more. The correction will be even stronger if the data on the Golden Week in terms of consumption is weak,”said Alicia Garcia-Herrero, chief economist for the Asia Pacific region at investment bank Natixis.

“The market is reacting to the lack of a real fiscal stimulus. I would not have organised a press conference not to announce anything new.”

The Chinese government has been trying to boost confidence in the world’s second largest economy as concerns increase that it may miss its own 5% annual growth target.

Investors have been pouring into Chinese stocks since officials began rolling out a raft of measures aimed at boosting the economy.

The plans included help for the country’s crisis-hit property industry, support for the stock market, cash handouts for the poor and more government spending.

But some economists have questioned whether the policies will be enough to fix China’s economic problems.

They say deep reforms might be needed in order to set the country on a more sustainable growth path.

Growth has been slowing in the world’s second largest economy as it continues to face a property market slump, falling prices and other challenges.

Erizia Rubyjeana 

Follow us on:

AriseNews

Recent Posts

New Zealand Rejects Cook Islands’ Bid For A Separate Passport

New Zealand has rejected the Cook Islands’ proposal for a separate passport, requiring full independence…

21 minutes ago

Honda, Nissan Eye Major Merger, Aim to Finalise Deal by 2025

Honda and Nissan plan a merger to create the world’s third-largest automaker, aiming to finalise…

22 minutes ago

Trump Chooses Ex-Bank President As Latin America Envoy Despite Alleged Affair Scandal

Trump has selected ex-bank president Mauricio Claver-Carone as Latin America envoy, despite past misconduct allegations…

24 minutes ago

Trump Threatens to Take Control of Panama Canal Over ‘Exorbitant’ Fees in Fiery Speech

Trump has demanded Panama reduce Canal fees or return it to US control, sparking backlash…

28 minutes ago

Ex-US Marine Pilot Daniel Duggan to Be Extradited to US Over Alleged Illegal Training of Chinese Pilots

Australia has approved the extradition of ex-marine Daniel Duggan, facing US charges for allegedly training…

30 minutes ago

Trump Nominates Billion Dollar Buyer Host Tilman Fertitta as US Ambassador to Italy

Donald Trump has selected businessman Tilman Fertitta, owner of the Houston Rockets, to serve as…

1 hour ago