The trials and tribulations of China’s stock market never fail to amaze Business Insider, and today is no exception.
On the back of remarks from PBoC governor Zhou Xiaochuan, posted in the bank’s website earlier today, stating the highly anticipated Shenzhen-Hong Kong stock connect would begin operation before the end of 2015, stocks went on an absolute tear. From Hong Kong in the south to Shanghai in the north, markets were going nuts, posting gains of between 2.8% to 4.5%.
However, there was only one problem. Not only were the remarks from Zhou not from today, this week or even this quarter. They were made some five months ago in May.
Zhou’s comments were published in a lengthy article dated Tuesday on the need for Communist Party discipline that appeared on the PBoC’s website without any indication that the statements were old, according to Bloomberg.
The central bank later confirmed in a text message that Zhou’s comments on the link were taken from a speech on May 27.
Without passing comment on the need for Chinese financial market reforms — posting such an important statement with no time stamp speaks volumes in itself — it looks like today’s rally was built on nothing more than surprise that the stock connect would go ahead this year, something few expected given the extreme market volatility seen in Chinese stocks over the past five months.
Despite the news being five months old, markets, somewhat curiously, continue to cling on to most of their early session gains. The Hang Seng halved its initial gain, sitting up 1.5%, and markets on the mainland remain up by close to 3%.
Who said fundamentals weren’t a crucial factor in Chinese stock market movements, right?
You can read more from Bloomberg here.
Business Insider Emails & Alerts
Site highlights each day to your inbox.