Stock signals from China
Chinese stocks keep falling, despite a push by Beijing to talk up the world's second largest economy at Davos. Is this a signal of trouble ahead, or a buying opportunity?
Chinese stocks have been gaining attention as a potential contrarian trade for 2024, if only because of how poorly they’ve been performing.
With the new year barely three weeks old, China’s main share gauge has already shed 10% amid depressed economic sentiment.
It follows an already torrid 2023 for the Shanghai market and more broadly for the Chinese economy, which failed to roar back to life after reopening from lengthy Covid restrictions.
Instead, real estate distress, local government debt and weak consumer confidence ensured Chinese and Hong Kong share indices ended the year as the world’s worst performers among the major bourses. The benchmark CSI 300 Index has lost more than 40% of its value since its 2021 peak.
