China's Stock Markets Brace for Volatility Amid Stimulus Uncertainty

Chinese stock markets anticipate volatility as traders react to vague government stimulus promises. Despite upbeat past weeks, doubts persist over effective state intervention. Analysts highlight a need for substantial fiscal measures to boost growth amid mixed economic signals, including softening inflation and deepening producer price deflation.

China's stock markets are preparing for a volatile trading session on Monday as traders react to the government's latest stimulus promises. While intentions are ambitious, details remain sparse, leaving investors uncertain about the scope of support for China's unstable economy.

During a Saturday news conference, Finance Minister Lan Foan promised increased government debt to aid the economy but did not provide specifics about spending amounts or timelines. This lack of detail has disappointed investors, seen in the subdued response from U.S.-listed exchange-traded funds during after-hours trading.

Despite an uptick of 12% in the Shanghai Composite index since late September when initial support measures were announced, uncertainties persist over government intervention, notably in property and tourism stocks. Global commodity markets and currencies sensitive to China's economic health, like the Australian dollar, reflect this uncertainty with volatility.

(With inputs from agencies.)