It has been a fairly good year for the Chinese Stocks, as optimism is high on a likely US China trade deal and also because of seeing a turnaround in the economy.
On April 16, 2019, Shanghai composite had made a stride of over 30% as compared to 2018 close. Similarly, Shenzhen component registered 40% gains since the last close of 2018. Likewise, CSI 300, an index that comprise of mainland’s largest companies posted a 35% growth. These when compared to Dow Jones, it registered over 13% growth, while S&P 500 grew by over 15%.
The Chinese markets were in turmoil in 2018, one of their worst in 10 years. Shanghai composite was down by 24.6% as compared to previous year’s closing.
The economy has jumped, with China registering higher than expected GDP in Q1 of 2019. This will result in lifting up of market sentiments. The Chinese economy saw a 6.4% growth in Q1 of 2019 as against the analysts estimate of 6.3%.
Data collected privately and officially suggest an improvement in China’s economy. This is attributed to swift stimulus steps taken by the Chinese leadership. In March, manufacturing and exports grew better than the estimates.
Also, China has made headway in the US China trade deal recently. The negotiators from China are making unprecedented offers in various areas including intelligent property rights, which had been a major bone in contention so far. Mnuchin, the US treasury secretary says that both the sides will have to do lot of work.
The progress of the talks between the 2 countries has raised investor hopes about the trade deal. Strategist believes that the corporate sentiments and the economy will likely improve over the coming 6 months.
Meanwhile, the Chinese retail investors are optimistic, but have been taking home money after a bad year.