China's stock market has been a darling lately, something I suspected was coming a month ago.
What wasn't clear was who was doing the buying -- domestic or foreign investors -- and how much conviction they have. In October, we got a taste of this dynamic as the rest of the world briefly fell in love with Chinese stock markets only to see most of the rally dashed.
This time money is pouring into Hong Kong again, which is always a sign that it's more of a foreign bid rather than domestic but today we saw a different side. Yesterday stocks in China were crushed with US ETFs falling 5%. That was seen in the open in China but instead of falling further, the bottom was on the initial tick and there was some good buying for most of the day until sellers crept back in late.
Even with the late selling, the index finished well off the lows and I take that as a good sign. More importantly, I take the buying-the-dip in Asian trading as a sign that domestic investors are wading in.
That's a critical change and indicates that Chinese investors might finally be starting to feel some optimism. Remember, China was locked down 5 years ago this month and it's been dark days since then. Are we finally seeing green shoots? If not animal spirits?
It's early and much hinges on the National People's Congress starting March 5 but I take today's price action as a good sign -- not just for China but for global growth trades.
This article was written by Adam Button at www.forexlive.com.Hence then, the article about chinese domestic buying of equities is a good sign for the economy was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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