Chinese stocks stand out as rare winners in global equity rout, driven by improving Covid-19 situation
- China’s benchmark CSI 300 Index rose 2 per cent this week, standing out within a global sea of red
- The CSI 300 Index had its worst January-April period since 2008 with a 19 per cent loss
Chinese stocks saw a reversal of fortune this week versus global peers as investors tiptoed back into the market, betting an expected lift of Shanghai lockdowns would spur a rally.
While the outlook remains highly uncertain, with China’s zero-Covid stance set to keep pressuring growth and the global economy looking fragile, stimulus promises from Beijing and cheap valuations are making more traders willing to take risks.
“We don’t get so greedy as to try to time the market for the rock bottom,” said Yang Wei, a fund manager at Longwin Investment Management. “Valuations for some are now attractive enough to take the chance,” added Yang, who’s been building back equity positions since late March.
The CSI 300 Index had its worst January-April period since 2008 with a 19 per cent loss, hammered by lengthy lockdowns in major cities as well as the Federal Reserve’s aggressive rate hikes. Come this month, the Chinese benchmark has fallen the least among the world’s major national indexes so far. The smaller tech-heavy ChiNext Index just had its best week in a year.
The number of community cases in Shanghai have declined to near zero, a threshold for the city to lift its harsh lockdowns. Officials are aiming to achieve that goal by May 20. In Beijing, the authorities on Friday denied rumours that the capital will be locked down.
