Chinese good for economy not so good for stocks

Chinese stock market is back in negative as it portrays that fundamental means nothing for Chinese stocks.

Today Chinese data after a very long time surprised to the upside, which could little to keep the stock market buoyant, which is again back in red after three days of rise till Monday.

At one hand -

• Chinese economy grew 7% in second quarter, while market was expecting growth rate to fall at 6.9%. Moreover industrial production rose by 6.8%, while median estimate was for 6%. Similarly retail, sales grew by 10.6% in June, compared to 10.1% in May.

On the other hand -

• Chinese benchmark stock index dropped by -3% today. It rose for three consecutive days till Monday as authorities show determination to stem stock crash. Small cap stocks in China fell more than 7 per cent in afternoon trading

 It seems good news for the economy is not so good for stocks, since it would mean lesser stimulus from authorities.

However Chinese government has taken up the agenda to do whatever it takes to avert a stock market crash will act soon if selloffs gather pace again in coming days.