China Investors Need More Than Words to Find Faith in Markets
- Hang Seng Tech Index’s record 22% surge may be one-day wonder
- Uncertainty remains on industry crackdowns, property support
Pedestrians pass an electronic screen displaying the Hang Seng Index in Hong Kong, on March 15.
Photographer: Paul Yeung/BloombergA series of official pledges and written commitments to stability may provide short-term relief to China’s beleaguered equity markets, but it may take more than just words to instill confidence and drive a sustained turnaround.
On Wednesday, Chinese officials vowed to stabilize financial markets, promising to ease a regulatory crackdown, support property and technology companies and stimulate the economy. The series of statements spurred a jaw-dropping 22% rebound in the Hang Seng Tech Index, with a gauge of China shares listed in Hong Kong soaring by the most since the financial crisis. U.S.-listed Chinese stocks also soared the most since at least 2001.