Chinese stocks in overseas markets continue upward trajectory as stimulus boosts investor optimism
Chinese stocks listed overseas continued their upward trajectory, even as the Chinese mainland market closed for the week-long National Day holidays. This trend highlights how recent stimulus measures in China have boosted overseas investors' confidence in the Chinese economy and assets.
Chinese stocks showed significant strength in the US markets as the NASDAQ Golden Dragon China Index rose 4.93 percent on Wednesday, marking its first close above 8,000 points since February 2023.
The NASDAQ Golden Dragon China Index has rallied for six consecutive trading sessions since September 25.
Exchange-traded funds (ETFs) overseas that track Chinese stocks continued their recent rally on Wednesday. Several popular China ETFs in the US - KraneShares CSI China Internet ETF, iShares China Large-Cap ETF, and iShares MSCI China ETF - all closed at least 5 percent higher on the day.
A wave of capital that previously left Chinese equities for stocks in Japan and Southeast Asia is poised to reverse as investors rush to catch the rally, Bloomberg reported, citing market watchers.
Overseas investors' bullish sentiments in Chinese assets were fueled by a package of stimulus measures announced last week by China's financial regulators, which experts expect will shore up the growth of the world's second-largest economy.
A combination of financial measures has provided the much-needed stimulus for the Chinese economy, Wei Jianguo, former Chinese vice minister of commerce and executive deputy director of the China Center for International Economic Exchanges, told the Global Times.
Coupled with the implementation of interest rate cut and reserve requirement ratio cut, the policy of China to cut existing mortgage rates is expected to help the real estate market stabilize and move toward a healthier trajectory, Wei said.
This round of market rally indicates that global investors are optimistic about a series of recently implemented macroeconomic policies, reversing their previous pessimistic sentiments, Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Thursday.
China's recent support policies for the real estate industry are beneficial for boosting related sectors. Subsequent policies aimed at promoting consumption will stimulate demand, further enhancing expectations for economic growth, Yang said.