This week proved once again (as if more evidence were required) that the A-share market is little more than the twitchy knee and lower leg that jerks sharply upward when hit by the mallet of policy announcements.* Thanks to the big fiscal spending package China announced over the weekend, the market has been swinging north ever since, with the Shanghai Composite Index up 17% since hitting a two-year low last week. What was different this time, though, was that the news prompted positive reflexes on other exchanges in Asia and the rest of the world. The reactions died down fairly quickly outside of Asia, but Chinese stocks are all shooting upward.
So how did our stocks fare? In a word, beautifully. It’s certainly been a big week for Anhui Conch (600585.SH) – which, as one of China’s largest cement producers should stand to benefit from more infrastructure building projects under the package. It’s up nearly 30% this week alone, rising by the 10% limit on Monday after the announcement and climbing steadily since then to reach 24.46 at the time of this posting. ICBC (601398.SH) is up as well, but by a tamer 8.7% clip on the week. Who knows how long this reaction will last, but for now we are only 36.79% down from June, compared with 47.1% last week.
*This is not to say that other markets are still in the face of big policy news – all perfectly natural, of course. But China’s do seem to be driven by awfully little else.
You must log in to post a comment.