retreated after the market reopened following a holiday, as the fiscal stimulus unveiled by China’s finance ministry undershot investor expectations.
“There was no dollar figure, timeline, or clear road map. Investors are left in limbo, waiting for more clarity, likely until the next meeting of China’s legislature,” said Stephen Innes, managing director at SPI Asset Management in Bangkok. “The lack of specifics over the weekend feels like a classic case of Beijing kicking the can down the road, and with a deflationary mindset creeping into consumer behaviour, that’s a recipe for disaster.
To sustain the bull run in Chinese and Hong Kong stocks that has added US$4.4 trillion in market value over the past three weeks, Beijing would need to roll out fiscal stimulus worth 3 trillion yuan to revive growth and boost consumption, according to Daiwa and Nomura.