China’s policymakers disappointed investors this week with a lack of follow-through on recent monetary policy stimulus measures. They get a second chance this weekend.

The recent surge in Chinese stocks paused over the last two days after Beijing failed to roll out another large stimulus package, a surprise to investors hoping to add more fuel to the unprecedented rally.

A stock market rally in China has fizzled out as a highly-anticipated announcement on plans to boost the country's ailing economy disappointed investors. Shares had jumped by over 10% as trading restarted after the Golden Week holiday but fell back after a news conference by the country's economic planners.

Chinese stocks tumbled on Wednesday alongside their Hong Kong peers, as investors sought to profit from a blistering rally, which was dampened by the lack of powerful stimulus measures to revive the economy.

Chinas recent stimulus measures triggered a significant rally in local stock markets, pushing key indices like the Shanghai Shenzhen CSI 300 and the Shanghai Composite to two-year highs. However, according to MRB Partners,

Gaining on them is economic reality that has many wondering if the more than 30% surge in equities from a September low is overdone. The problem is an underlying economy facing intensifying headwinds. And one failing to keep pace with the sudden surge in investor optimism toward China.

Before the Golden Week break, China announced the most aggressive stimulus measures since the pandemic and the CSI300 gained 25% over five sessions. Flows on Tuesday were directed at broad index funds and pockets of the market expected to benefit from government largesse.