High CPI makes shares rebound

High CPI makes shares rebound
Feb 21, 2008 01:39
FRANKENSTEIN Points: Join Date: Nov 29, 2004 Status: offline	On Feb. 19, the NBS publicized that CPI in January had increased by 7.1 percent compared with the same period last year and 1.2 percent higher than December, which had set a new record in recent 11 years. The food prices have increased 18.2 percent. After the CPI released, a Shenzhen and Shanghai stock markets trembled seriously and then rebounced back a little. Some investors think that shares in mainland stock market won't increase rapid in recent period and hope the government can take some measures to save the market. However, it seems that the government doesn't intend to do so. Why? The data has suggested that China's economy is overheated and the government has just made up its mind to change its policy from 'prudent' to 'tightening'. On the other hand, the snow storm just ended and it had some negative effect on the economy. The CPI might increase because of the snow storm. Considering of this, the government will stick to the 'tightening' policy. How do you foresee Chinese stock markets? Do you think the government will adopt some measures to stimulate the market?

Feb 21, 2008 01:39

FRANKENSTEIN
Points:
Join Date: Nov 29, 2004
Status: offline

On Feb. 19, the NBS publicized that CPI in January had increased by 7.1 percent compared with the same period last year and 1.2 percent higher than December, which had set a new record in recent 11 years. The food prices have increased 18.2 percent. After the CPI released, a Shenzhen and Shanghai stock markets trembled seriously and then rebounced back a little.

Some investors think that shares in mainland stock market won't increase rapid in recent period and hope the government can take some measures to save the market. However, it seems that the government doesn't intend to do so. Why? The data has suggested that China's economy is overheated and the government has just made up its mind to change its policy from 'prudent' to 'tightening'. On the other hand, the snow storm just ended and it had some negative effect on the economy. The CPI might increase because of the snow storm. Considering of this, the government will stick to the 'tightening' policy.

How do you foresee Chinese stock markets? Do you think the government will adopt some measures to stimulate the market?

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