A New "Anomaly" Emerges In Chinese Markets

Tyler Durden's picture

The Shanghai Composite Index, notorious for its wild swings over the past two years, has gone 85 trading days without a loss of more than 1% on a closing basis, the longest stretch since the market’s infancy in 1992.


The last 4 days have highlighted the unusual effect in Chinese stocks.. each time the Shanghai Composite dropped over 1% (red dotted line) it was miraculously lifted to ensure it closed with a loss less than 1%...


As Bloomberg reports, authorities favor a steady stock market because it helps companies fund investment and repay debt by issuing new shares, which could help boost economic growth, according to Yin Ming, a vice president at Baptized Capital in Shanghai.

“The national team is behind it,” Yin said. “State funds will likely continue to be a market stabilizer.”

For some investors, it’s a sign that state-directed funds are putting a floor under daily market swings - a development that presents short-term buying opportunities when the Shanghai Composite dips more than 1%  during intraday trading - but when this happens in the US its completely normal and defended as animal spirits that mean "stocks just want to go higher."

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Donald Trump's picture
Donald Trump (not verified) Apr 20, 2017 8:05 PM

A lot of anomalies about the chinks. Lately they embraced fracking even though it cost them 6x our costs... and not making much of a dent  with it.

Fracking Sweeps into China Without Making Much of a Difference



Could it be that they are running out of things to throw their paper money on?

BigFatUglyBubble's picture

They should make giant yuan bonfires and charge spectator admission for the event!

Xatos's picture

About that article ZH had yesterday saying Trump was going to "back out" of his position on TPP...




You shills that have taken over ZH downvoted me into oblivioun when I stood up for Trump and said that's not what's happening, you're all being duped into this anti-Trump crap that's totally manufactured. 


I'm right. As always. Again. Read my message history. I've been 100% accurate for 2 years on this fucking site. Trump isn't being drained by the swamp, he's 90% doing exactly what he's supposed to and maneuvering the rest with patience. Chill the fuck out. Do you people REALIZE how many amazing bills he has signed? Have you forgotten or do you not realize that between his deregulations, Carson's findings in HUD, and the downsizing of the government he's already slashed 700 BILLION dollars? How are you people being so easily swayed away now that we are on our way? 


Calm down.

poland spring's picture

I've come to loathe the word "stability".

BigFatUglyBubble's picture

It's like bumper bowling for stawks

BandGap's picture

Where have I seen this before?


Herdee's picture

Nice to know that the Fed's trading desk has help from the Chinese Central Bank on manipulating markets.

Sky flyer's picture

I suppose their "national team" is no different than our PPT.

zzzz88's picture

it is not just china. almost all the stock markets are rigged by the central banks. it just showed how scared they are. but this also means next bear market will be very long, down very deep. just look at what happened after all the long bull market. this is called T theory. 

Dragon HAwk's picture

A Little easier to reign in Speculators, when you are allowed to Shoot them Or make them Disappear.

DavidC's picture

FFS, how many times have I said this?! It's NOT 'reign', it's 'REIN'!

If people are going to use long words like that, then LOOK THEM UP FIRST.

Reigning is ruling, as with a king or queen. Reining is the use use of reins, as with a horse.


Stormtrooper's picture

I would be willing to help prop up world markets if Janet would give me a printing press and the legal authority to print funny money with abandon.  In fact, I bet that I could give the PPT a hell of a lot of competition.

sinbad2's picture

Chinese stealing another American idea.

economessed's picture

More proof that the Chinese communists are better capitalists than the Americans are.

Stemmer's picture

"authorities favor a steady stock market because it helps companies fund investment and repay debt by issuing new shares, which could help boost economic growth, according to Yin Ming, a vice president at Baptized Capital in Shanghai."


Finally I have figured it out!  Chinese style.



Ouagadoudou's picture

Chinese always good at copying hehe

Mementoil's picture

Have you ever went on a drinking binge, consuming copious amounts of alcohol during one evening?
Do you remember how you threw up after that, your body trying to rid itself of the toxic substance?
Well, that's exactly what's going to happen to any stock market which is manipulated up by the government - when the downturn comes, it will happen in uncontrolled convulsions. There will simply be no bid, and the PPT will be the only buyer. Soon, the government will find itself effectively nationalizing the stock market using newly printed money.