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Chinese stock investors smell more government help, even as trade data tanks

Most of the world appears to be leery of China’s remarkably weak trade data out today. And yet, Chinese stock market investors seem to be loving it. The Shanghai Composite was up 2.2%. Hong Kong’s Hang Seng rose more than 1%. Why? Chinese equity watchers are betting that the newly installed government can’t afford to let the economy get too weak. And they think that the government may act to support growth in some way, perhaps by freeing up more money for Chinese banks to lend by cutting their reserve requirements. The jump in stocks seems to have been fueled in part by a public statement from Premier Li Keqiang, who said macroeconomic policies should “ensure economic growth at a reasonable range.” Here’s a look at the Shanghai Composite today, the surge appeared to gather steam after the lunchtime break in trading.

Shanghai-Composite-Index_chart (2)

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