Chinese stock market surges after economic boost

Mon, 10/07/2024

by Ellie LeTu

Source: Financial Times

• China’s central bank stimulated the economy (09/2024)

  • Cut interest rates.

  • Reduced reserve requirement ratios for commercial banks.

  • Allowed stock purchases with borrowed money.

• Stock market responds with sharp rise

  • Current situation: Stock market has been gloomy and low consumer spending since 2020.

  • Stocks rallied after central bank’s new policy.

    • Major Chinese indices enjoyed a 30-35% rise.

    • Many households are opening stock trading accounts.

• Concerns

  • Sustaining the stock price rise is uncertain, with year-on-year growth below 5%.

  • While other countries face inflation, China is struggling with deflation.