Caricatures and drawings on Forex portal
Chinese stocks may soar soon
The Chinese stock market is on the rise. The economic dragon of China is also in a good mood. According to Bloomberg, China’s stocks have seen their biggest rally in 16 years.
Thanks to economic support measures introduced by the Chinese government, shares of national companies surged dramatically. The key CSI 300 index jumped by 9.04% at one point, marking its sharpest rise since 2008.
Later, the CSI 300’s growth settled at 8.11%, and the index corrected to 4,004.17 points. Meanwhile, the Hang Seng China Enterprises Index, tracking performance in Hong Kong, climbed by 3.66%, reaching 7,566.98 points.
Experts point to the week-long holiday as another factor boosting China’s stock market. From October 1 to 7, China celebrates National Day, prompting a flurry in investors’ activity. Demand for stock purchases was so high that some brokers experienced disruptions.
For the past nine days, Chinese stocks have been steadily rising. This rally has helped stocks recover part of their years-long decline. Remember that in early September, the CSI 300 dropped by 45% from its 2021 peak, but in the latter half of the month, it rebounded by 20%.
The Chinese government's stimulus package, which investors have been eagerly following, includes interest rate cuts, liquidity support for stocks, and relaxed reserve requirements for banks. Additionally, home purchase rules were eased in China’s three largest cities, and the People’s Bank of China lowered mortgage rates. Experts believe these decisions will greatly support the construction sector, whose longstanding problems have been holding back China’s stock market.
Before the introduction of these measures, from January to August 2024, foreign direct investment in China’s economy plummeted by 31.5% to $81.7 billion.
Published 04 October 2024
© InstaFintech Group
![]()
© InstaFintech Group
