Chinese government officials refuse to accept a slowdown for long. Officials cut the stamp tax rate – tax on the purchase or sale of stocks – from 0.3% to 0.1%. Institutional investors buying or selling 100,000 or more shares are now required to do it privately to reduce volume moves.
These moves kicked off the rally that has lasted into this week. Whether it will stick is open to debate, but if China begins to head lower, have your exit strategy in place.
For full disclosure, Tom Lydon’s clients own shares of FXI.
