(Bloomberg) -- Chinese stocks fluctuated in early Monday trading as investors assessed the potential impact of the support measures announced by the finance ministry over the weekend.

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The CSI 300 Index swung between a gain of 1.7% and a loss of 0.5%. It capped its worst week since late July on Friday. A Bloomberg Intelligence gauge of Chinese developers was little changed after rallying more than 4%.

The swings underscore caution as traders await more details on the fiscal measures. Finance Minister Lan Fo’an promised new steps to support the property sector and hinted at greater government borrowing at the Saturday briefing, but fell short of giving a headline dollar figure. Revved up fiscal spending is seen as holding the key to sustaining the stock market rally ignited by the central bank’s stimulus blitz in late September.

“There’s going to be consolidation and pullback,” said Wendy Liu, chief Asia and China equity strategist at JPMorgan Chase & Co. “The structural stimulus will be sort of positive to the long-only investors looking at the investment on a 2-3 year view. Short-term, it is not as satisfying.”

An index of Chinese shares listed in Hong Kong fell more than 2%, reversing an earlier gain. Data on Sunday showed China’s deflationary problems became more entrenched in September, with consumer prices still weak and factory gate prices continuing to fall.

Meanwhile, officials from various Chinese departments kicked off another briefing on Monday to discuss stepping up policy support for businesses.

‘Upside Capped’

Local governments will be allowed to use special bonds to buy unsold homes, Lan and his deputies said at the Saturday briefing, without giving an amount. Lan hinted at room for issuing more sovereign bonds and vowed to relieve the debt burden of local governments, signaling a possible rare revision to the budget that could come in the next few weeks.

Prior to the weekend, investors and analysts surveyed by Bloomberg had expected China to deploy as much as 2 trillion yuan ($283 billion) in fresh fiscal stimulus on Saturday, including potential subsidies, consumption vouchers and financial support for families with children.

Market volatility had risen in the run up to the MOF briefing, with the CSI 300 Index sliding 3.3% last week. As the rally stalls, concern may grow that the latest rebound may be yet another false dawn. The market has been caught in a start-stop cycle of gains and losses a few times before as Beijing’s piecemeal approach to stimulus produced only brief rebounds.

“I suspect November’s US election and the FOMC could delay large stimulus to December or later, and investors might stay away before that and third-quarter results, so upside could be a bit capped for now,” said Xin-Yao Ng, an investment director at abrdn Asia Ltd.

--With assistance from John Cheng.

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