Chinese stock investors and watchers are actively discussing the market ahead of its reopening. China announced a surprise stimulus package a week before the National Day holiday, ripping apart a battered market. Chinese social media users are looking forward to the market reopening. There are also skeptics of a sustained bull market.
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Chinese investors are looking forward to stock market movements after the week-long National Day holiday.
On Monday, a day before mainland markets reopened, China’s Weibo microblogs were abuzz with talk about what the future holds for markets after a sharp rally on September 24 in response to the onslaught of Chinese government stimulus measures. .
China’s domestic stock market is dominated by individual traders, who number over 200 million and account for approximately 70% of trading volume.
China’s economic stimulus package includes 800 billion yuan (about $114 billion) to cut interest rates and support the domestic stock market. The country’s top leadership also promised further economic stimulus measures were in the works. The world’s second-largest economy faces multiple challenges, including a real estate crisis, deflation and high youth unemployment.
Mainland China’s benchmark CSI 300 index closed 17% year-to-date on Sept. 31, before a weeklong hiatus. This is in contrast to the slump and lackluster share price performance for much of the year.
Hong Kong’s Hang Seng Index ended 1.6% higher on Monday. Year-to-date, it’s up about 35%.
Trending topics on Weibo included #Hong Kong stocks, #how long will this bull market last, and #A-share trends after the holidays. A-shares are shares of Chinese companies listed on the Shanghai Stock Exchange and the Shenzhen Stock Exchange.
“I hope the rally lasts a little longer and I can at least recoup my initial investment,” one Weibo user wrote. The CSI 300 index fell 45% from its peak in 2021 to the key announcement in late September.
There was also a trending hashtag discussing people concerned about not being able to buy A shares on Tuesday. Ahead of the week-long holiday, some brokers and traders reported delays at the Shanghai Stock Exchange as the system was overloaded by enthusiastic investors and market watchers.
Despite the market’s rise, there are many skeptics about China’s economic outlook and markets, and there is no shortage of naysayers on Weibo.
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“I don’t feel safe even if this topic becomes a trend,” one Weibo user said in a thread discussing the expected duration of the bull market, which garnered nearly 700 likes in 30 minutes.
“Experts say this is bullshit, not a bull market,” a second user wrote.
“What’s the economic situation in China right now? Are you blind? Can’t you see?” asked a third user commenting on another post discussing the market rally.
However, given how much Chinese stocks were sold off before the government announced its stimulus plan, there may be room for further upside.
Goldman Sachs is overweight Chinese stocks and expects them to rise another 15% to 20%.
The Chinese government’s “coordinated and strong policy announcements” amid an “oversold, undervalued and undervalued market backdrop” are a key factor, the bank’s analysts said on Saturday. stated in a memo issued.
If the economy responds positively to the Chinese government’s coordinated stimulus measures, corporate profits could also grow, they wrote.
While warning that China’s macroeconomic challenges remain serious, he said: “Together, these announcements constitute a more substantial policy stimulus, as opposed to the sporadic and gradual easing of the past few years. “I will,” he wrote.
