Daily Management Review

China Sees A Ray Of Hope After A ‘Worst Weekly Performance’


01/14/2016


The stock market of China rose across the board following a suspension of a “breaker mechanism”.



According to last week’s closing reports, China’s stock market witnessed a last moment upward swing, whereby it ended at a two percent higher rate and stayed put in “positive territory”. In the midst of panic stricken investors, the regulators’ bid of suspending “a newly-minted circuit breaker mechanism” was an attempt to calm the crowd which brought about the positive turn in the stock graph.
 
Shenzhen and Shanghai’s largest companies as listed by the index of CSI300, showed an increment of two percent whereby touching by at “3,361.56”, while on the other hand, the “Shanghai Composite Index” showed the two percent gain as “3,186.41 points”.
 
However, the beginning week of 2016 exhibited the “worst weekly performance” of China after the summer market crash. Likewise, the market lost nearly ten percent.
 
Before the end of the week, an announcement by the securities regulator revealed the “suspension of circuit breakers” only after four days of operation. They claimed that the mechanism failed to work as it was anticipated. Moreover, the performance took a negative route all together.
 
According to analysts, the regulators’ move instilled a fresh breath of life into the market of China. In the words of Kaiyuan Securities’ analyst, Tian Weidong:
"The market is back to normal. Investors can buy and sell as they wish”.
"Under the circuit breaker mechanism, the market was suffocated."
 
The closing performance of last week soared across the board for China, whereby the resource sector gained over six percent while the energy counterpart leaped by five percent.
 
The gain is to be attributed to the efforts of Beijing, wherein attempts were made to bring down “excess capacity” and as per the analyst, it is the said effort that “will lead to industry consolidation and benefit major listed players”.






References:
http://profit.ndtv.com/
 







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