China stock ETFs rip higher even as mainland markets close for holiday

Finance

People walk on a pedestrian bridge displaying the Shanghai and Shenzhen stock indexes on January 02, 2024 in Shanghai, China. 
Hugo Hu | Getty Images

Exchange-traded funds overseas that track Chinese stocks continued their stimulus-triggered rally Wednesday even as mainland markets were shut for a week-long holiday.

Several popular China ETFs in the U.S. — KraneShares CSI China Internet ETF (KWEB), iShares China Large-Cap ETF (FXI), iShares MSCI China ETF (MCHI) and Invesco Golden Dragon China ETF (PGJ) — all jumped at least 5% in morning trading. KWEB and PGJ advanced for a fifth straight day.

Chinese stock ETFs surge

That’s because these funds mostly invest in Chinese equities that trade on the Hong Kong Stock Exchange or U.S. exchange-listed companies that are headquartered or incorporated in China. Mainland Chinese markets, including Shanghai and Shenzhen stock exchanges, will remain closed until Oct. 8.

“I am bullish on Chinese equities; this time is different,” Scott Rubner, tactical specialist at Goldman Sachs, said in a note. “I have never seen this much daily demand for Chinese equities: I do not even think we have gone back to benchmark index weights yet.”

Chinese equities turned around last week after Beijing unleashed a flood of stimulus measures to aid a deep economic slump, including rate cuts and reducing the amount of cash banks need to have on hand.

The government vow to provide strong stimulus induced newfound optimism in Chinese stocks that were beaten down amid a sluggish economy as well as regulatory crackdowns the past few years. David Tepper, founder of hedge fund Appaloosa Management, told CNBC last week that he’s buying “everything” related to China because of the government support.

JD.com surged 5% Wednesday, rising for a fifth straight day. Another e-commerce name PDD popped 4.8% after a 8% rally in the day prior.

Articles You May Like

What investors can learn from the S&P’s performance after presidential elections since 1928
Here’s why Americans traveling to Europe may find bargains in 2025
Best Buy cuts full-year sales forecast due to softer demand for consumer electronics
You’re ‘wired’ to overspend during the holidays, expert says — here’s what to do about it
Here are the last days to ship a holiday package with FedEx, UPS and USPS to ensure gifts arrive on time

Leave a Reply

Your email address will not be published. Required fields are marked *