August 21, 2008 at 12:00 pm by Tom Lydon
After a big jump yesterday, China’s markets and exchange traded funds (ETFs) are trading lower today.
The leap forward came as a result of speculation that Beijing would launch an economic stimulus package, reports Parvathy Ullatil for Reuters. The markets saw their biggest gain in four months. Today, though, skepticism abounded and the previous day’s gains were eliminated.
Government officials aren’t talking about the plan, Elaine Kurtenbach for the Associated Press says. The rumors, however, were that the country’s leaders were considering a stimulus package worth at least $29.1 billion as well as a plan to ease monetary policy by the end of the year, reports Judy Hua for Reuters.
The idea of a post-Olympic bounce in China was momentarily floated, as a number of foreign fund managers are poking around the market. They’re seeing impressive valuations, reports The Economist. But as the stocks have fallen back today, the pessimists think that such stimulus packages would likely not do any good, since trade is the country’s main vulnerability. Container traffic to Europe has stalled, and it’s been contracting to the United States since last year.
- iShares FTSE/Xinhua China 25 Index (FXI), down 25.8% year-to-date
- SPDR S&P China (GXC), down 29.8% year-to-date
- PowerShares Golden Dragon Halter USX China (PGJ), down 30.3% year-to-date
- NETS Hang Seng China Enterprises Index (SNO), down 17.4% since May 22 launch
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