Stimulus Package Rumours Buoy Stocks, But Stoke Overheating Jitters

August 2008 | Market Strategy

Speculation that Beijing is to introduce a fiscal stimulus package to ensure that sagging growth remains well supported has had investors rushing to buy back into Chinese equities, helping to resuscitate the ailing Shanghai Composite Index (SCI). The benchmark index gained a massive 7.6% on August 20, setting up renewed hope of a push back towards the 2,600 area, a break beyond which could see the SCI once again retest resistance at the all-important 2,900 level.

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