The rebound last week was largely due to speculation of a supposed ¥1 trillion rescue package for the stock market. Instead, it ended up being a 50 bps RRR cut and that didn't quite live up to the hype. As mentioned then, those two things are not quite the same thing. And that already casted some doubts about the rally, with it perhaps being a dead cat bounce. Fast forward to today, and we definitely got the answer to that.
The Shanghai Composite index is down nearly 3% on the day now and more importantly, falling below the 2,700 mark. The index is now at its lowest since March 2020, which was when the Covid pandemic struck. Meanwhile, the CSI 300 index is also down close to 3% as well to its lowest levels since January 2019.
If anything else, this shows a vote of no confidence towards the latest measures taken up by Beijing to stop the bleeding. The biggest thing that is needed is fiscal change and there's still no sign of that yet.