Chinese shares surged to a nine-month high on Wednesday bolstered by hopes of more stimulus measures from Beijing, but the rally failed to fuel broader gains in global markets as investors waited for fresh central bank cues.
Benchmark indexes in China rose 1-2 per cent after China’s state planner said the government would implement measures to further boost domestic consumption to counter the impact of a slowing economy.
Taking into account Wednesday’s gains, Shanghai Composite Index has now gained a quarter so far this year but is still down more than 13 per cent from January 2018 as fears of a wider slowdown in the economy have dogged sentiment.
“China is outperforming today because of the stimulus plans and that is a localised phenomenon as other global markets are focused on central bank decisions and major economic data," said Ricardo Evangelista, a senior analyst at ActivTrades in London.
Fresh signs of dovishness from major central banks as China is moving to boost its economy and the U.S. Federal Reserve is signalling a pause in its rate hike cycle would boost equities and high-yielding debt, at a time when broader economic data has shown signs of flagging.
A Citi Research's gauge on U.S. economic data surprises is holding near a two-year low while a European index is holding well below September 2018 highs. Reuters