Chinese equities appeared to lose the weekend’s momentum as trading opened on Tuesday. The optimism generated by Beijing’s recent bullish statements appear to be giving way to doubts over the effectiveness of the leaders’ suggested policies.
The CSI 300, which tracks headline stocks from Shanghai and Shenzhen, could not replicate the 4% gains made Monday, when the country’s bourses posted their biggest one-day climb in almost three years.
Stimulus measures announced in the wake of last Friday’s disappointing growth data may have sparked investors confidence temporarily, but analysts are retaining caution about the market’s outlook.
“China will increasingly rely on foreign inflows to fund domestic investment and sustain domestic debt dynamics, which makes all the deleveraging reform and the liberalisation process ever more urgent,” analysts from Societe Generale told the Financial Times.