**China’s Economic Stimulus Sparks Historic Rally in Stocks**
In a remarkable turnaround, China’s stock market has surged to its highest point in 16 years, with US-listed ETFs also experiencing a significant boost. The Shanghai Composite Index saw an impressive 8.06% increase, marking its best day since 2008 and extending its winning streak to nine days. The index ended September with a 17.39% gain, its first monthly increase in five months and its strongest performance since April 2015.
The Shenzhen Composite Index also reached new heights, closing up 10.9% in its best day since 1996. It gained 24.8% in September, its best month since 2007. The China ADR index rose nearly 6%, with shares of Kanzhun, Bilibili, Tencent Music Entertainment, and Futu Holdings experiencing significant gains.
The KraneShares CSI China Internet ETF (KWEB) and the iShares China Large-Cap ETF (FXI) also saw notable increases, rising 4.2% and 2.2%, respectively. Alibaba and JD.com shares also surged, gaining over 4% and 5.4%, respectively.
The rally is attributed to Beijing’s recent economic stimulus measures, including interest rate cuts, aimed at supporting the struggling property market. Chinese President Xi Jinping and other top leaders have reaffirmed their commitment to these measures, boosting investor confidence.
According to Art Hogan, chief market strategist at B. Riley Securities, “While it’s unclear if these measures will be enough to kick-start the economy, it’s certainly a step in the right direction.” He believes that a strengthening China will have a positive impact on markets going forward, and investors will need to reassess their expectations.
The optimism is shared by billionaire hedge fund founder David Tepper, who has expressed overwhelming bullishness on Chinese equities, having invested heavily in China-related assets following the Federal Reserve’s recent rate cut.
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