{"id":1431506,"date":"2023-10-09T00:50:11","date_gmt":"2023-10-09T04:50:11","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1431506"},"modified":"2023-10-09T00:50:11","modified_gmt":"2023-10-09T04:50:11","slug":"china-markets-face-choppy-return-from-holidays","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/china-markets-face-choppy-return-from-holidays\/1431506\/","title":{"rendered":"China Markets Face Choppy Return From Holidays"},"content":{"rendered":"

China Markets Face Choppy Return From Holidays<\/span><\/p>\n

\n

By John Cheng, Bloomberg Markets Live reporter and strategist<\/em><\/p>\n

Chinese markets are set to reopen after the Golden Week holidays against an uncertain global market backdrop, which may temper optimism from the\u00a0spending boom\u00a0at home.<\/p>\n

A lot has happened overseas while mainland markets were shut. Risk assets were hammered as renewed concern about higher-for-longer US interest rates spurred a Treasuries selloff that\u00a0rippled\u00a0through world markets, while the surprise\u00a0attack\u00a0on Israel by the Palestinian group Hamas added a fresh layer of uncertainty. On the domestic front, however, tourism revenue from the holidays surged year-on-year, adding to\u00a0bets\u00a0that China\u2019s economy has likely bottomed.<\/p>\n

The conflicting signals set the stage for a choppy start for mainland equities on Monday. A gauge of Chinese\u00a0shares\u00a0listed in Hong Kong rose on Friday, helping trim its losses since Sept. 28 \u2014 when onshore markets last traded \u2014 to 0.3%. Meanwhile, an\u00a0index\u00a0of the nation\u2019s US-listed stocks has gained 0.3% in the period. The offshore yuan has weakened about 0.2% against the dollar.<\/p>\n

<\/a><\/p>\n

\u201cThe Golden Week consumption data should give more confidence to markets that demand is stabilizing, which may help boost sentiment for consumer and service sectors,\u201d said\u00a0Marvin Chen, a strategist with Bloomberg Intelligence. \u201cBut easing domestic worries come with rising external headwinds from markets adjusting to higher-for-longer Fed rates.\u201d<\/p>\n

Traders had been pinning their hopes on a holiday consumption boost to provide a new catalyst for the sluggish market. Travel and spending\u00a0surged\u00a0compared with lockdown-hit 2022, with 826 million travelers representing a 71% increase from last year. Spending jumping nearly 130%. Other key sets of data released during the break also showed the broader economy is on the\u00a0mend, though far from roaring back.<\/p>\n

Investors will weigh these modest improvements against concerns about tighter Federal Reserve policy following a\u00a0hotter-than-expected\u00a0US jobs report. China is seen at particular risk as a wider interest-rate gap with the US can increase\u00a0pressure\u00a0on the yuan and accelerate a\u00a0capital flight.<\/p>\n

<\/a><\/p>\n

The\u00a0CSI 300 Index, a benchmark of onshore Chinese stocks, was down 4.7% for the year before heading into the break. A further 4.9% decline will see it erase all its gains from the reopening rally that took off in October 2022. Reaching that grim milestone may embolden China skeptics, who continue to shun the market due to deepening property-sector woes and geopolitical concerns.<\/p>\n

The housing market slump remains a major overhang, with the crisis embroiling debt-ridden developer China Evergrande Group and other key builders showing little signs of abating. Home sales continued to post double-digit declines from a year earlier in\u00a0September, a traditionally busy season for builders, underscoring weak buyer confidence despite a recent slew of property easing measures.<\/p>\n

\u00a0<\/p>\n

Some investors, however, say this year\u2019s relentless selloff has created some\u00a0buying opportunities. There are also hopes that the upcoming third plenum of the 20th Party Congress, a gathering of top leaders to discuss major economic and reform issues, will offer hints of further stimulus. The meeting, to be held toward the end of October and early November, could act as a positive catalyst, said Chen of Bloomberg Intelligence.<\/p>\n

\u201cWe can expect a recovery toward the end of the year or early next year with the economy coming toward the end of the de-stocking cycle, and as we see more coordinated policy efforts to tackle the weak economy,\u201d said\u00a0Elizabeth Kwik, investment director of Asian equities at abrdn Plc.<\/p>\n

For now, winning back foreign investors is proving to be hard. Global funds sold Chinese shares on a net basis for a second consecutive month in September, trimming their exposure to the\u00a0lowest level\u00a0since 2020. Pessimism is such that \u201cshort China equities\u201d emerged as one of the\u00a0biggest convictions\u00a0among money managers in the latest Bank of America Corp. monthly survey.<\/p>\n

\u201cWe have economic data showing improvement so that\u2019s a good start, but markets are skeptical given how confidence was badly damaged,\u201d said\u00a0Christopher Wong, FX strategist at Oversea-Chinese Banking Corp. in Singapore. It will take time for Chinese markets to recover, he added, as \u201csentiment needs to recover and confidence needs to be repaired.\u201d<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nSun, 10\/08\/2023 – 20:50<\/span><\/p>\n

\u200bhttps:\/\/www.zerohedge.com\/markets\/china-markets-face-choppy-return-holidays<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

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