China stocks up 9% today!
With the government lowering the stamp duties for stocks, Chinese went up more than 9% today and it’s the biggest rise since the Shanghai and Shenzhen stock exchanges opened in 1990. At least 200 stocks have risen 10% – the daily upside limit.
Is it a good sign? Finally dreams have come true for investors. The government finally invervenes: first it requires all block trades to go off-market, and now the stamp duties are back to 0.1 % from 0.3% – the same level it was a year ago before the market went berserk.
Personally I believe it will provide support for short term. I give people confidence to go into the stock market again. But selling pressure will continue – particularly with the billions of shares with lock ups that expire this year. If there is another wave of selling pressure, the government can’t do much. And then this time it may be a fall even worse than what we are experiencing now. Furthermore, all the positive catalysts seem to disappear soon after the Olympics.
The Olympic flame went off a few times in today’s torch relay event in Australia. Is it a bad omen for China?
