Chinese stocks bounce back
After a long period of hibernation, possible changes to China’s covid policy has Chinese stocks looking ready for action, but the excitement might be premature.
The Hang Seng China Enterprises Index rallied by 9% last week, indicating that the under-performance of Chinese stocks might be coming to an end. The rally comes after a two-year slump which saw nearly $6tn worth of losses.
The gains were being fueled by speculation on changes to China’s covid policy, with rumors circulating that the government is to begin unwinding its strict ‘zero-covid’ rules and lockdowns. Hong Kong’s Hang Seng Index also rallied by around 8.5% last week.
Some believe that investors are getting ahead of themselves. Despite the rumors, Chinese health officials have reaffirmed that they are sticking to current covid regulations, with no changes officially confirmed yet.
Alejandro Luengo / Unsplash
