After months of hints and vague promises, Beijing came to the rescueof Chinese shares in a surprise announcement last night on national TV that the duty on stock trading would be reduced to just one tenth of one percent, repealing last May's increase that aimed at curbing short term speculation and reducing volatility. Volatility however is here to stay given high inflation and commodities values.
Values shot up across all boards with the Shanghai Composite gaining over 9% to close at 3,583. Many observers had claimed3,600 as a sustainable level with current earnings andperformance. As always, I'll update the markets on each episode ofThe Sinomania! Show.
Labels: bubble, chinese stocks, index, inflation, shanghai composite, shares