China’s most powerful stock rally in a decade rose out of desperation, but can dissipate just as quickly if met with nothing but empty words.
As of Monday, the benchmark MSCI China and CSI 300 indices gained 36% and 27% from their recent lows after top policymakers promised a barrage of stimulus measures at the end of September before going on the weeklong national holiday. While lacking in operational details, the policy blueprints were notable in their tone and scope. The government has “revealed its ‘pain threshold,’” exclaimed Goldman Sachs Group, while upgrading its calls on Chinese stocks to overweight.
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