People walk on a pedestrian bridge displaying stock tickers in Shanghai and Shenzhen on January 02, 2024 in Shanghai, China.
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This is because these funds mostly invest in Chinese stocks that are traded on the Hong Kong Stock Exchange or US-listed companies that are headquartered or incorporated in China. Mainland Chinese markets, including the Shanghai and Shenzhen stock exchanges, will remain closed until October 8.
“I'm bullish on Chinese stocks, and this time is different,” Scott Rubner, a Goldman Sachs tactical specialist, said in a note. “I've never seen this much daily demand for Chinese stocks: I don't even think we're back to standard index weights yet.”
Chinese stocks turned last week after Beijing unleashed a torrent of stimulus measures to help with a deep economic downturn, including interest rate cuts and reducing the amount of cash banks need to access.
The government's pledge to provide strong stimulus has brought new optimism to Chinese stocks, which have been battered amid an economic slowdown as well as regulatory measures in the past few years. David Tepper, founder of hedge fund Appaloosa Management, told CNBC last week that he is buying “everything” related to China because of government support.
JD.com rose 5% on Wednesday, rising for the fifth straight day. Another e-commerce name PDD rose 4.8% after an 8% rise the previous day.
