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