news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

stimulated by the federal reserve's interest rate cuts and china's major favorable policies, chinese assets have been favored by domestic and overseas funds in recent days, and a-shares and hong kong stocks have been enjoying the carnival for several days.

"buy 'everything' in china!" - wall street's enthusiasm for chinese assets is heating up rapidly. chinese companies listed on the u.s. stock market are also sought after by funds and have become the brightest stars in the u.s. stock market.

the carnival of chinese concept stocks cannot stop

while a-shares are in the lively atmosphere of the national day golden week, chinese concept stocks on the other side of the pacific congratulate the chinese holiday with rising stock prices.

on tuesday eastern time, as tensions in the middle east intensified, the rising momentum of the u.s. stock market was suppressed, and the three major stock indexes suffered a "bad start" in october. as of the close of the day, the nasdaq composite index closed down 1.53%, and the s&p 500 index and the dow jones index fell 0.93% and 0.41% respectively.

in addition, the s&p 500 volatility index (vix), known as the "fear index", closed at 19.26, the highest level since september 12, with an intraday high of 20.73. a level above 20 means that market sentiment is relatively nervous. worries are rising.

on such a weak trading day, chinese concept stocks stood out and enjoyed the strong momentum brought by the chinese market.

the nasdaq china golden dragon index, which reflects the performance of chinese concept stocks, bucked the trend and soared 5.48%, continuing its strong momentum over the past week and closing at its highest level in the past year.

among the 64 constituent stocks of the china golden dragon index, 54 stocks recorded gains, and market trading was active. among them, the biggest increase was finqile operator lexin (lx.us), which rose 26.84% in a single day; beke (beke.us), which benefited from favorable real estate policies, rose 17.43%. in addition, bilibili (bili.us) also surged 14.33%, and stocks such as dada group (dada.us), li auto (li.us) and gds (gds.us) also performed well.

after the market closed, many chinese concept stocks were still active. as of press time, among popular chinese concept stocks, bilibili rose 11.86%, jd.com (jd.us) rose 10.62%, nio (nio.us) rose 7.25%, and alibaba (baba.us) rose 4.36%. pinduoduo (pdd.us) rose 4.92%.

it is worth mentioning that the sharp rise in concept stocks in this round has overwhelmed short funds.

according to a report from s3partners, short sellers have accumulated losses of us$6.9 billion in this market, wiping out short sellers’ gains of approximately us$3.7 billion so far this year, and resulting in current book losses of approximately us$3.2 billion.

foreign capital is continuing to buy chinese assets

in the past few years, a-shares and hong kong stocks have underperformed major global stock markets, and chinese concept stocks are not immune to this, resulting in very attractive valuations of chinese assets.

the effect of the federal reserve's interest rate cuts will help improve the liquidity of global capital markets. therefore, chinese assets that have previously squeezed out a lot of risks have received the focus of funds. on the other hand, following the federal reserve's interest rate cut, my country launched a series of favorable policies to promote economic development, which greatly boosted the confidence of domestic and foreign investors, which is good for chinese stocks and chinese concept stocks.

guosen securities recently released a report stating that since late september, foreign capital has accelerated its inflow into the chinese stock market. in 2024 (year to date), the net inflow of chinese equity funds has exceeded that of the whole of 2021.

chinese concept stocks are also very “money-attracting”, and foreign investors are buying into chinese concept stock etfs in large quantities.

futu niuniu data shows that kraneshares china overseas internet etf (kweb) saw a net inflow of us$199 million from september 23 to september 27, setting a new high since march 2023. in addition, the size of the fund reached us$6.522 billion in september 2024, an increase of more than us$2.3 billion from 4.177 billion yuan in august.

not only is kweb buying chinese assets in large quantities, many overseas funds also have a positive attitude towards chinese assets. some overseas hedge fund people said that the current attitude of foreign investment in china is to "buy china in an all-round way."chauwei yak, ceo of multi-strategy hedge fund gao capital, even believes that investors “don’t even need to pick stocks now.”

david chao, a strategist at invesco asset management, said, "investors' phobia of missing out is rising." he believes that the rise in china's stock market is likely to continue. the chinese market is momentum-centric, and the current rally bears some similarities to the 2014-2015 rally.as the u.s. dollar continues to weaken on the back of federal reserve interest rate cuts, expect a possible rotation away from expensive and crowded global technology trades and toward cheaper emerging market assets.