China’s market rescue is failing as Xi holds back on stimulus
economictimes.indiatimes.comChina’s regulators face a losing battle convincing global funds to invest in the nation’s stocks unless market boosting efforts are accompanied by stronger stimulus to support growth.
Officials have undertaken a flurry of measures in recent days to improve battered sentiment in the world’s second-largest stock market. They’ve urged financial institutions to snap up equities, encouraged companies to boost buybacks, and asked mutual funds to stop selling.
All to little avail, with the MSCI China Index slumping a further 1.3% at the close of local markets on Friday.
“Investors have been disappointed by the lack of concrete measures to boost the economy,” said Karine Hirn, partner at East Capital Asset Management. “Without stronger measures from the government and while political tensions between China and the West continue, the market may continue trending down.”
The MSCI China index has tumbled 11% this month, set for its worst performance since October and putting it in the red for a third straight year.
Country Gardens Holding Co., previously China’s largest developer, has led losses in August with a 49% drop amid concern the company will default on its dollar debt.
Global funds have been fleeing the mainland market, offloading almost $11 billion in a 13-day run of withdrawals through Wednesday, the longest since Bloomberg began tracking the data in 2016. Wall Street analysts are also turning more downbeat, with Morgan Stanley and Goldman Sachs Group Inc.
lowering their targets on Chinese stocks in the past week, after starting the year on a positive note.
Despite the nation’s top leaders promising pro-growth policies at the Politburo meeting on July 24, little has been done to counter the slowdown. That’s drawn
