China’s stock rally for the ages shows power of crowds
It could take months until we know the real economic impact of Beijing’s latest stimulus round. But markets are not hanging around to find out.
The scorching rally in Chinese stocks over the past week or so underlines one of the key rules of markets: always keep an eye on the crowd.
Shortly before an extended market holiday, authorities in Beijing sent a forceful message that enough was enough. The economy is stuck (by Chinese standards, most Western economies would be delighted with growth rates of a bit above 4.5 per cent), and the sharemarket had been bleeding out for months.
Financial Times
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