Giant on the move
No new stimulus? Buy!
Global markets surged on Wednesday, led by the Shanghai stock market’s 6.1 percent gain, on hopes that Chinese Premier Wen Jiabao would announce a new stimulus on top of the 4 trillion yuan ($585 billion) two-year spending plan unveiled in November.
Investors were optimistic that with a bit help from the central government, the economy could turn the corner and start to regain lost ground, heading off a rise in unemployment that officials fear could threaten social stability.
But in his 2-hour report to the annual meeting of parliament, Wen made no mention of the much hoped-for injection.
No matter. Speculators and investors poured back into China’s share market on Thursday, grasping new reasons to be upbeat, and pushing up the index another 1.04 percent.
Wen’s speech was positive enough to support hopes that an economic recovery was starting. He set an ambitious target of 5 trillion yuan in new lending this year, and insisted this year’s 8 percent economic growth target would be met.
Will that be enough to keep investors’ momentum going?
Here’s a link to Reuters coverage of the speech and its impact:
Photo captions: Premier Wen Jiabao delivers speech during the opening ceremony of the National People’s Congress at the Great Hall of the People, REUTERS/Jason Lee