Chinese Stock Market Surges on Beijing's Aggressive Stimulus Measures

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ICARO Media Group
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01/10/2024 18h26

**Chinese Stock Market Soars Following Aggressive Stimulus Measures by Beijing**

In an unexpected surge, the Invesco Golden Dragon China ETF witnessed its most impressive three-day performance since March 18, 2022, climbing 36.85%. This swift rise in Chinese stocks follows Beijing's announcement of significant economic stimulus initiatives, the most aggressive measures the country has taken since the pandemic began.

John Petrides, portfolio manager at Tocqueville Asset Management, highlighted the situation during his appearance on "The Claman Countdown," remarking that China has evidently "hit the panic button" from both an economic and monetary policy standpoint. This has triggered substantial rallies in all China-related investments. He also noted that while Japanese and European stocks saw rallies earlier in the year, there is still considerable potential for growth internationally.

Among the measures taken by Beijing to support its faltering economy were notable interest rate cuts and the easing of home-buying regulations. The People's Bank of China also relaxed capital requirement restrictions for banks. This slew of policies motivated many traders to capitalize on the rally before the start of a week-long holiday on Tuesday, pushing the CSI300 index up by 8.5% by the close. This propelled its five-day gain to more than 25%, marking the strongest performance on record.

Meanwhile, the broader Shanghai Composite Index saw a total turnover of 1.17 trillion yuan, equivalent to $166.84 billion, and increased by 8.1%. The CSI300 blue-chip index has surged nearly 30% from its February low, which places it in what some market analysts would define as a bull market, with most of the gains materializing rapidly over just a few trading sessions.

These rapid gains are reflective of the renewed investor confidence driven by Beijing’s robust policy support, suggesting that the market might continue on this upward trajectory in the near term.

The views expressed in this article do not reflect the opinion of ICARO, or any of its affiliates.

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