New Shanghai rally: – This is most critical for China – Stock and finance – Hegnar.no – HegnarOnline

Shanghai Stock Exchange rises sharply for the second straight day Friday.

Large-cap index CSI 300 put on 5.8 percent, while the Shanghai Composite Index is up 5.2 percent.

The rise comes after a series of government measures, including interest rate cuts, stay in IPOs and prohibitions for major shareholders to sell shares.

Wall Street commentary here.

– This is critical for China
Some analysts expecting new measures over the weekend, as a new interest rate cut or new cuts in banks’ reserve requirements.

Meanwhile, the ruling nevertheless concern effect the stock market crash will have on the real economy of the country.

For example, the collapse of iron ore prices an ominous sign.

Bank of America Merrill Lynch expects according to Bloomberg contagion effects on both the real economy and company results.

– We expect that this will affect consumption further ahead. More critical is the potential disruption of credit flows due to writedowns in financial institutions’ balance sheets, writes brokerage in a note.

See also: Iron ore prices collapsing – a bad sign for China

– People think the worst is over
Elsewhere in Asia fell Nikkei 0.38 percent to 19,779.83 Friday, while the broader Topiix index rose 0.23 percent to 1,583.55.

Tung watchman Fast Retailing falls 6.0 percent on weaker sales guidance for the current quarter.

– Most people think the worst is over. But Nikkeis downside is still expecting around 19,000 if something happens in China, but I do not think we will see a fall below these levels for the time being, says equity strategist Isao Kubo in Nissay Asset Management, told Reuters.

We take also with the Hang Seng in Hong Kong put on 2.1 percent, while Seoul Stock Exchange is marginally up.

Taiwan Stock Exchange falls 0.7 percent, while the Sydney Stock Exchange climbs 0.5 percent.

Asia-section here.