It is predicted that the Chinese stock market will end its February break and enter a liquidity market. It is predicted that the stock market will lead an additional rally as the momentum of the stock market shifts from “Riofning (Resumption of the Economy)” to “Recovery (Economic Recovery).”
The Wall Street Journal (WSJ) reported on the 20th (local time) that the Chinese stock market led the rise of the global stock market while the New York stock market was closed for “President’s Day.” The previous day, the Chinese stock market closed higher ahead of the two sessions on rising expectations for stimulus measures and economic recovery.
The CSI300 Index, China’s leading index consisting of 300 market capitalization stocks in Shanghai and Shenzhen, rose 2.5% from the previous day, the largest daily increase this year. Hong Kong’s Hang Seng Index also jumped more than 1.5% from the previous session.
Experts predict that the upward trend of the Chinese stock market will continue with the momentum of economic recovery this year. Goldman Sachs predicted that the Morgan Stanley Capital International (MSCI) China Index will rise 24% more than last week’s closing price by the end of this year.
Goldman Sachs said in the report that “the main theme of the market will shift from “economic resumption” to “economic recovery” this year,” adding, “The future upward momentum is also likely to be transferred to earnings growth.”
Since the easing of quarantine in early December last year, the Chinese stock market has held a rally in anticipation of an economic resumption. Activity indicators revived due to the change in quarantine policies, and the Chinese Manufacturing Purchasing Managers’ Index (PMI) and non-manufacturing PMI recorded 50.1 and 54.4, respectively, confirming the shift to economic expansion.
Both mainland China and Hong Kong stock markets rebounded sharply until the end of last month on expectations of Chinese authorities’ economic stimulus, but the upward trend stopped in February amid the absence of momentum.
The Wall Street Journal (WSJ) also analyzed that the U.S.-China conflict, which was the biggest topic of the stock market, is escalating as it spreads from reconnaissance balloons to arms support-related battles, but the negative impact on the stock market is weakening.
