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Fortunes of China’s Stocks May Lead to Further Easing

The plunge in China’s stock market – which suffered its worst weekly drop last week since 2008 – has helped fuel already-heightened expectations mainland authorities will launch fresh monetary stimulus in the near future.

The benchmark Shanghai Composite index plunged 13.3 percent last week, entering into correction territory, precipitated by concerns over rising valuations and tighter liquidity in the market.

“Insufficient open market operation liquidity injections and a coincidental surge of IPOs [initial public offerings] in the A-share market shook Chinese stocks,” said Steve Wang, chief China economist at Reorient Research.

CNBC [1]

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