Short-term positive, but long-term negative?

LAST week's column pointed out that China's influence on global equity sentiment appeared to be waning. Volatility was easing and traders should stick to the Straits Times Index (STI) because although the longer-term economic outlook is not good with central banks running on empty, there was nonetheless a tradeable bounce to play.

Even so, the STI's 7 per cent rise over the week would probably have caught most by surprise, though its outperformance, which came partly after a reserve ratio cut in China, makes sense when you consi…