A rise on Monday for Asian stocks was followed by a similar gain in the United States.
HK50: Weekly Chart
The HK50 jumped across support in the open but closed lower. The US market rally could help Asian stocks again on Tuesday.
China’s latest package of market-boosting measures helped boost markets on Monday, with the government halving the stamp duty on stock trading while curbing the supply of new shares and divestments by major shareholders.
However, investment bank Nomura said it will do little to help markets in the short term. The measures announced on Sunday night to revive investors’ confidence are simply a follow-through of plans made at a Politburo meeting late last month and do not represent a meaningful increment in policy support, said Harrington Zhang in a report on Monday.
“The impact will be short-lived if these measures are not followed by measures for supporting the real economy,” the analysts said. “Without additional, more aggressive policy stimulus, these stock market-focused policies alone will have little sustainable positive impact on stock markets, not to mention any positive impact on the economy.”
Nomura’s comments are in contrast to those made by Chinese brokerages, with both Guotai Junan Securities and Soochow Securities saying that the measures will increase risk appetite and boost stock valuations.
The proof will come in the following weeks, with Hong Kong stocks up the most in five weeks on Monday. Property sector issues still loom, with Evergrande stock opening for trading for the first time in 17 months and the company’s shares falling more than 78%.
Finances were better at the firm, with the loss attributable to shareholders reaching 33 billion yuan ($4.5 billion) for the first half, a 50% drop from the same period a year ago. Revenue was 44% up from a year ago, reaching 128.2 billion yuan ($17.6 billion).
