SHANGHAI -China's stock markets roared back from a week-long break and climbed to their highest levels in more than two years at the open, but lost steam after officials failed to inspire confidence in stimulus plans intended to turnaround a sputtering economy., catapulted to be the top-performing major market this year by its sharpest weeks-long rally in a generation , closed 9.4% lower - its heaviest fall since 2008.
"Ultimately for the rally to be sustainable, we need to see more fiscal policy and more measures to support the economy and the property market," said Vasu Menon, managing director of investment strategy at OCBC in Singapore. Flows on Tuesday were directed at broad index funds and pockets of the market expected to benefit from government largesse.
"It's still early stage of the bull market, and still a good time to buy stocks," he said, recommending small-caps that typically outperform blue-chips when the market is hot. In Hong Kong, however, mainland property developers fell 15.5%, the biggest one-day percentage drop on record. Analysts said the selling reflected profit taking after a week of gains and balancing mainland moves, rather than a mood shift.