China stock boosting measures fail to convincingly lift markets

The fresh round of stock boosting measures over the weekend failed to convincingly lift the stock markets yesterday. 

While the headline Shanghai Composite Index (SHCOMP) closed 2.4% higher, it masked the broader weakness given that more than two in three stocks declined and gains were led by larger companies that would be the main beneficiaries from the brokerages' earlier pledge to invest at least CNY120bn (USD19.3bn) should the Index fall below 4500. 

The recent weakness in the stock markets underscores the difficulties authorities face in their near-daily attempts in the past couple of weeks to guide the stock markets higher. If anything, the stock markets should be seen remaining policy driven in the near term, says Commerzbank.