Chinese Stocks Soar Most Since 2015

According to the report, Chinese stocks have rallied for nine consecutive days, marking one of the most extraordinary turnarounds in recent history. The CSI 300 Index surged by 6.5% on Monday, its largest daily gain since 2015, as investors flocked to capitalize on opportunities before the week-long holiday. Having plummeted over 45% from its peak in 2021, the index has rebounded more than 20%, signaling a potential shift towards a bull market.

This upswing is largely attributed to significant policy changes in three major Chinese cities that have relaxed regulations for homebuyers, alongside the central banks decision to lower mortgage rates. These measures are part of an expansive stimulus initiative introduced recently, which includes interest rate cuts and enhanced liquidity support for banks and the stock market.

While previous rallies have often fizzled out, theres a palpable sense of optimism among investors this time around. Trading volumes on the Shanghai and Shenzhen exchanges skyrocketed, exceeding one trillion yuan ($143 billion) within just 30 minutes of the market opening.

Charu Chanana, a global markets strategist at Saxo Markets, commented on the situation, stating, “This rapid recovery highlights how oversold the market had become. Theres a growing belief that government support will be more robust this time.”

Brokerage firms have emerged as significant beneficiaries of this bullish trend, with Citic Securities Co. reaching its daily upside limit. The majority of stocks within the CSI 300 also posted gains, reflecting widespread investor enthusiasm.

Moreover, the excitement isnt limited to domestic markets; international hedge funds are reallocating investments, shifting from U.S. tech stocks to sectors like mining and materials in response to the bullish sentiment.

David Chao, a strategist at Invesco, believes this surge could herald a more sustainable recovery. “Theres a clear policy shift aimed at tackling the cyclical challenges of recent years. While implementation details are still under scrutiny, it appears a new path is being established,” he noted.

As the Chinese stock market embarks on this significant rally, market participants are keenly observing these developments, hopeful for a prolonged recovery.