After the Golden Week holiday, shares had increased by more than 10% as trading resumed, but they later declined following a press conference by the nation’s economic planners.
The Hang Seng in Hong Kong was down more than 7% during a tumultuous session that saw the Shanghai Composite Index in mainland China rise by about 3% in early afternoon trading.
Although the announcement provided little specifics, investors had been looking for additional information about how the government intends to boost economic growth.
Zheng Shanjie, the head of China’s National Development and Reform Commission, expressed his “complete confidence” in the nation.
Mr. Zheng made these remarks concurrently with his announcement that by the end of this year, China will allocate 200 billion yuan ($28 billion; £21.5 billion) for investment and spending projects.
In reality, the market was expecting more. The senior economist for the Asia Pacific area at investment bank Natixis, Alicia Garcia-Herrero, stated that if the statistics on consumption over the Golden Week is weak, the correction will be considerably more pronounced.
The absence of a true fiscal boost is causing the market to respond. If I hadn’t planned a news conference with nothing new to announce, I never would have.
The Chinese government has been attempting to restore faith in the second-largest economy in the world as worries about it potentially failing to meet its own 5% annual growth target mount.
