Chinese stocks surge 13% due to euphoria over government support and trade deal hopes.

From Google: 2024-09-29 19:00:00

Investors in China are rushing to buy stocks in a new bout of euphoria, pushing the Shanghai Composite Index up by 13%. This surge comes after months of sluggish performance and worries about a slowing economy. The frenzy is fueled by hopes of government support and optimism about a potential trade deal with the US.

The Chinese government is encouraging the bullish sentiment, with officials boosting liquidity in the market through various measures. Margin financing is also on the rise, with investors borrowing money to buy stocks. This surge in margin lending has reached its highest level since 2015, pointing to a return of risk appetite among investors.

Several Chinese companies have seen a significant boost in their stock prices, with shares of controversial firms like Kweichow Moutai Co. and Gree Electric Appliances Inc. jumping by more than 17%. The sudden uptick in stock prices has left many investors scrambling to get a piece of the action, with some fearing missing out on potential gains.

Despite the recent surge in Chinese stocks, some analysts remain cautious about the sustainability of the rally. They warn that the euphoria may be short-lived and could lead to a sharp correction in the market. Investors are advised to carefully assess the risks before diving headfirst into the frenzy, as past experiences have shown the volatility of the Chinese stock market.



Read more at Google: Hedging Goes Out the Door With Burst of China Stocks Euphoria – Bloomberg