From Bloomberg, October 14/15:
- CSI 300 falls as much as 2.2% as losses extend in late trade
- Investors await clarity on size of China’s fiscal stimulus
Losses in Chinese stocks deepened in Tuesday’s afternoon session, intensifying the debate over how much further the market’s stimulus-driven rally can go.
The CSI 300 Index slid more than 2%, on track to erase all of Monday’s 1.9% advance. A gauge of Chinese shares listed in Hong Kong slumped more than 3%. The yuan also weakened.
Volatility has gripped the market in recent sessions as investors assess the sustainability of the rebound that began late last month, with the lack of clarity over the size of Beijing’s planned fiscal boost weighing on sentiment. Weak recent economic data, including figures on inflation and trade, has underscored the need for more stimulus.
There’s concern “that the stimulus announced so far just isn’t enough,” said Nathan Thooft, chief investment officer and senior portfolio manager at Manulife Investment Management. “We put on a tactical overweight to Chinese equities. We are not necessarily believers that this is a structural shift.”
Tuesday’s price action suggests that investors are unimpressed by a Caixin report that said China may raise 6 trillion yuan ($846 billion) from ultra-long special government bonds over three years as part of its efforts to boost the sputtering economy.
Following the central bank’s easing steps in late September, investors have been clamoring for the government to bolster fiscal spending. Officials promised new measures to support the property sector and hinted at greater government borrowing at a weekend briefing, without giving an amount.
The yuan slid as much as 0.6% to 7.1343 per dollar in the offshore market, the weakest level in about a month....
....MUCH MORE
The CSI 300 Index closed the session down 105.35 (-2.66%) at 3,855.99, the low for the day. Not a good sign.
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