China’s stock market reopened Wednesday. How is it faring?

Chinese stock markets are recovering at last after the extended break forced by the coronavirus outbreak. The country has already lifted most restrictions and is beginning to open businesses. Analysts seem more confident that China’s efforts to maintain market stability will be successful. As well as in the country’s ability to recover from the economic impact of the coronavirus pandemic.

The CSI 300 Index of stocks, which traded for the first time since Thursday, closed 0.6% higher after declining by 1.2%. On the other hand, the Chinese yuan lowered by 0.4% to $7.091, while its offshore counterpart rose by 0.25%.

Dai Ming, fund manager at Hengsheng Asset Management Co., noted that Wednesday’s open suggests onshore traders are pricing in higher confidence about China’s economic recovery.

However, investors worry due to the escalating political tensions between the U.S. and China. President Trump declared that he wants retribution as China is guilty of spreading the virus. Trump’s statements threaten to undermine a trade deal signed only months ago.

Still, some analysts are more hopeful. Zhou Hao, an economist at Commerzbank AG in Singapore, noted that market sentiment isn’t very badly affected by the verbal fight between the U.S. and China yet. According to him, the hope remains that China will commit to the trade deal. Market stability is very important for Chinese officials.

The Chinese market tried to rebound in February. Will it be different now?

China’s market has already reopened once in February, but the stocks fell more by 9.1% then. And the yuan was low during most of the six months. However, the situation seems different now. The government launched lots of support measures to help the economy recover, easing concern over cratering domestic demand along the way. Markets have stabilized also.

However, analysts don’t expect to see a strong rally due to the bleak outlook globally. They think that rebound will take time. According to Ma Cheng, chairman at Shenzhen Juze Investment Management Co., the main opportunities remained in specific sectors rather than the overall market.