Shanghai ends lockdown: formal reopening fails to impress stock traders as path to economic recovery remains unclear
- The Shanghai Composite Index fell 0.1 per cent on Wednesday, reflecting investors’ apathy
- The Shanghai exchange has lost some of its edge against Shenzhen, which now accounts for over half of the combined average trading volume on the two bourses
Stock traders were unenthused by the lifting of the two-month lockdown in Shanghai, as they want policymakers to do more to revitalise the economy roiled by the pandemic.
While people went about their normal activities and workers returned to offices and factories following the city’s reopening, unimpressed stock investors sat on the sidelines looking for signs of a pickup in economic activity.
The benchmark Shanghai Composite Index closed 0.1 per cent lower on Wednesday, reflecting investors’ apathy.
China will need to take more action throughout the year to revive its economy, which investment banks including JPMorgan Chase have predicted will contract this quarter. Stimulus packages unveiled so far – cuts in the reserve requirement ratio and subsidies to small businesses – are not enough to spur growth across the board, economists said.
“The damage to consumer confidence is already done,” said Wang Qi, chief investment officer at MTI Management in Hong Kong. “The biggest economic challenge is not supply but demand.”