Action by major international central banks to provide liquidity to struggling European banks pushed Chinese blue chips higher but gains narrowed after the Hang Seng Index hit strong resistance.
Encouraging news from China these days does not necessarily mean gains for China stocks. Take Thursday, for example. China announced the July exports grew at a faster-than-expected pace of 20.4% year-on-year. And the Shanghai...
Hong Kong stocks opened sharply higher following the announcement Friday by U.S. Federal Reserve Board chairman Bernanke that the Fed might launch new measures in September to stimulate the U.S. economy.
China might see a technical rebound after a 20% swoon since early August. But there won't be a sustained recovery until the overhang of possible Greek default is eliminated.
The growing threat of default by Greece on its debt is the big factor driving China stocks sharply lower (along with other stocks around the world). Hong Kong's Hang Seng Index fell 3.4% Tuesday and has plummeted 7.6% in the last two days.
A default by Greece looms so large, it's almost easy to forget that there are China factors at work also adding to selling pressure.
Chinese stocks traded lower, ending the week's nice run for investors. Profit-taking emerged when the Hang Seng approached the formidable 21,000 resistance level.