Chinese futures rose slightly after the market reopened on Wednesday. The CSI 300 Index of stocks ended the session 0.6% higher after falling by 1.2%, trading for the first time since Thursday.
China’s stock market has already opened once in February, and the futures fell more by 9.1% then. The yuan was also low during most of the six months. Still, the situation seems different now. Markets seem more stabilized now. Following the Chinese authorities launch of various support measures to help the economy boost after the coronavirus pandemic.
Analysts are also more confident in the country’s ability to recover from the economic impact of the crisis. They think China will manage to maintain market stability. The country has already lifted most restrictions and opened some businesses.
According to Dai Ming, fund manager at Hengsheng Asset Management Co., Wednesday’s open suggests onshore traders are pricing in higher confidence about China’s economic recovery.
What about the U.S.-China’s budding conflict?
President Trump recently declared that he has proof about the virus spreading from Wuhan’s laboratory. As this Chinese city is the epicenter of the outbreak, Trump blames China for the pandemic and its results. President’s statements threaten to undermine a trade deal signed only months ago, as he demands retribution for damage.
While some investors are concerned due to the escalating political tensions between the U.S. and China, others remain hopeful that it won’t get out of hand. Market sentiment isn’t seriously affected by the verbal fight between the U.S. and China yet – noted Zhou Hao, an economist at Commerzbank AG in Singapore. According to him, the hope remains that China will commit to the trade deal. This is because market stability is very important for the country’s officials.
Despite that, analysts don’t think a strong rally is possible due to the bleak outlook worldwide. According to them, the rebound will take a long time. Ma Cheng, the chairman at Shenzhen Juze Investment Management Co., stated that the main opportunities remain in specific sectors rather than the overall market.
