Spreadex Market Update
Seemingly artificial boost for Chinese markets follows dismal trade data
The main news of the morning was further evidence (as if any more was needed) that the Chinese economy is continuing to stutter where it once soared. For August the country’s imports fell by a whopping 13.8% in US dollar denominated terms (that number creeps up to 14.3% in yuan-dominated terms) whilst exports tumbled 5.5% (again, up to 6.1% in yuan). Understandably the Shanghai Composite sharply dropped on the news, only for the index to close up nearly 3% by the end of the day.
It appears that, for all the statements and reports to the contrary, the Chinese government is going to continue to get its select band of market warriors to buoy the index and keep up the artifice of a healthy stock market. Just to fully reflect the extent to which China remains committed to preventing any more dramatic falls, the government is creating a ‘circuit breaker’ that would suspend trading in the case of a 5% rise/fall for 30 minutes, and end the trading day completely if the losses/gains increased to 7%. In comparison, the intervention-free Nikkei fell by 2.4%by the close (granted, it also had to deal with a confirmation of a shrinking second quarter GDP).
Interestingly, however, despite the transparent falseness of the Chinese rally, and the country’s fairly abysmal trade figures, the European indices have opened with another set of post 1% gains. Now all they have to do is keep them; Europe saw a similar open yesterday only for the majority of its growth to dissipate, so it is perhaps too early to tell if investors’ current confidence can carry all the way through to the end of the day. There is also the added kink of a returning US market; however, at the moment it appears the Dow Jones et al. would merely extend the current rebound, despite plenty of evidence from China stating that fears over the country’s health should only intensify.
It's easy to open an account
- Fill in our simple online application form
- Fund your account
- Start trading the global markets instantly!
SEARCH FOR AN ARTICLE:
Enter a keyword and search for all relevant articlesMARKET ANALYSIS
RECENT POSTS
DISCLAIMER
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. For professional clients, spread betting and CFD trading can also result in losses larger than your initial stake or deposit.
Spreadex Ltd is authorised and regulated by the Financial Conduct Authority, provides an execution only service and does not provide advice in any way. Nothing within this update should be deemed to constitute the provision of investment advice, recommendations, any other professional advice in any way, or a record of our trading prices. This update does not constitute or form part of an offer of, or solicitation for a transaction in any financial instrument, nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefore. Any persons placing trades based on their interpretation of the comments or information within this update does so entirely at their own risk.
No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained within this update by Spreadex Ltd or any of its employees and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained within this update.
The information contained within this update is the intellectual property of Spreadex Ltd and is protected by UK and International copyright laws. All rights reserved. Users may however freely download, distribute and reproduce extracts of the contents, subject always to accrediting Spreadex Ltd as the source and providing a hyperlink to www.spreadex.com.
