via scmp.com
Wild swings in China’s stock market have created a climate of uncertainty for investors, with some seeing opportunity and others fearing deeper turmoil ahead – a state of affairs reflected in the broader population by a marked hesitancy to spend.
For Stella Li and others like her, the turbulence of recent weeks has brought little but regret.
Her mother, tempted by talk of a potential fiscal stimulus, used savings originally earmarked for an early mortgage repayment to buy into the market. She is now facing down a significant loss.
Their reactions contrasted sharply with those of institutional investors, who took heart from the ministry’s plans for local debt relief and assurances the “room” to raise debt or fiscal deficits still exists. More than 90 per cent of China’s 200 million stock investors – one out of every seven people – are individuals with investments below 500,000 yuan (US$70,749).
Since late last month, Chinese exchanges surged after Beijing announced numerous policy packages to revive the economy, spurring white-hot speculation over further steps to curb drops in prices and demand, weak consumer confidence and an ailing real estate market.