What next for Chinese equities?

There is unlikely to be much respite for battered Chinese equity investors in the near term. Macroeconomic fundamentals suggest that the markets in Shanghai and Shenzhen may have fallen too far, but disappointing corporate earnings and fears over monetary policy tightening will keep investors on the back foot for a while yet. In the meantime, the government’s continued efforts to manage the level of prices condemn equities markets to further volatility.