The price of eggs in China went up 30% in July. Cooking oil by the same amount. Inflation brought on by the industrialization of China. So the People's Bank of China hiked rates today. Again. The forth time since March. No liquidity crunch over there.
The CSI 300 (equivalent to the S&P 500) actually went up 2% today in response to the hike. And no folks over there are not pricing in rate cuts going forward. Another hike is expected by the end of the year. The overnight lending rate is just over 7% right now. Could the scenario in China be any different than in North America? I've read about companies in China issuing press releases with bad news and stock prices going up as a result. People also apparently will buy securities based on the tickers alone. Lucky numbers and the like. Is China the bizarro world of the capital markets?
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