Last week, we wrote about the impressive 25% market recovery the Chinese stock market had witnessed since the beginning of the year. This week, the Chinese leadership demonstrated that it dislikes stock market exuberance at least as much as it does the credit excesses of the shadow banking sector. A ‘sell-note’ on one of China’s stock market darlings by a government-owned stockbroker caused market speculators to rush for the exit and sent the stock market down 4% in a single day.
Profit-taking became the theme of the week, with most markets closing slightly lower for the week. The European Central Bank (ECB) caused a negative reaction by deciding to join their US colleagues in easing monetary policy. To ease the tightening of liquidity from the end of its QE purchases, the ECB will reintroduce a bank refinancing instrument known by its great acronym of TLTRO. This should help to ease pressure on banks amid slowing European growth – a result of the global decline of demand from China and other Emerging Market economies.
Tatton Asset Management PLC (LON:TAM) offers a range of services to directly authorised financial advisers in the United Kingdom. The Company provides on-platform portfolio management, regulatory, compliance, and business consulting services.
