For the last few years, US equity traders have become conditioned to expect the miraculous arrival of some heavy-handed levitation in stock markets as 330pmET rolls by. This became ubiquitous enough to inspire a Twitter account. Well, it appears the Chinese have learnt a thing or two from the American manipulators... behold China's 2pm Ramp Capital at work.
Afternoons in the Chinese stock market have turned into a waiting game for the state-backed funds to arrive.
Over each of the past four days, China’s SSE 50 Index of large-capitalization companies has rebounded by an average 6.4 percent in late trading from session lows.
The gauge surged 15 percent over the four-day period, its biggest rally since 2008 and twice the 8.1 percent gain by the Shanghai Composite Index. The SSE 50 climbed 0.9 percent at the close on Tuesday, erasing an earlier loss of 4.8 percent.
The rallies are driven by government-backed funds buying shares to stabilize the market before a World War II victory parade on Thursday, according to IG Asia Pte.
Sadly - for the Chinese manipulators - unlike in 'Murica, where any momentum is good momentum, the 'burned' farmers and grandmas are selling into government buying... not buying alongside...
“When you see a straight line buying pattern in the last 45 minutes, that’s usually the national team supporting the market,” said Michelle Leung, chief executive officer of Xingtai Capital Management Ltd. in Hong Kong.
"When you track market opens or you track outstanding margin balance, we could see the bulk of retail investors selling."
And as one analyst warned...
"I don’t expect this intervention to continue in such a successive fashion longer out," Aw said. "I will still sit tight and await better valuations.”
Welcome to the new normal, China.