Chinese stock gauges rally 20%, bolstering market bottom calls
Live MintA rally in Chinese stocks has sent a number of benchmarks surging 20% from lows, a sign that the battered market may be headed for a more sustainable uptrend after multiple false dawns over the past year. “It’s rare to see China’s markets sustain a rally for weeks since the second half of last year,” said Fanwei Zeng, investment analyst at GAM Investment Management. “Most Chinese tech and renewables companies have been focusing on cost cutting and improving efficiency; we’ve seen improvements in margins and decent topline growth.” The upswing shows investors are coming to terms with China’s attempts to restructure its economy, with some betting that President Xi Jinping’s attempt to drive high-tech growth and end a property crisis will start to bear fruit. We are around the range of the bottoming.” Xi’s slogan of “high-quality development” — which prioritizes sustainable growth from high-tech industries over the debt-driven expansion of the past — is luring early bets from investors, who argue state support will drive industries from electric vehicles to hydrogen power, chipmakers and automation. “I think upping your allocation to China probably makes sense now,” Lazard Asset Management’s Chief Market Strategist Ronald Temple said in a Bloomberg TV interview last week.