Wednesday, 4 March 2009

Shanghai bounces six percent

The Shanghai Stock Exchange saw a nice bounce of 6% in trading on Wednesday (March 4) and there was also a rally on the Hang Seng, but this index remains in close contention with multi-year lows.
One should expect a lot of energy to be invested by those in the bullish V shaped recovery camp to make the most of any positive news from China but one has to remember that the Shanghai market was above 6000 in October 2007 and even after the more positive price behavior recently this index is still down more than 60% from its peak.
But every epic journey starts with small steps - so this index is worthy of consideration on the long side even if it may not be so much a harbinger of global recovery but rather a speculative play amongst hedge funds and other bottom fishers.

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