Chinese stocks could be set for a recovery after recent stimulus talk, according to Goldman Sachs.
CH50: Weekly Chart
The CH 50 rallied this week, and that gives hope that the market can break higher above the triangle formation resistance at 13,200–13,600.
Global hedge funds bought Chinese equities after this week’s Politburo meeting at their fastest pace since October 2022, Goldman Sachs said.
The highest inflows were to the CH 50 and Hong Kong-listed shares, while US-listed Chinese American Depositary Receipts (ADRs), mainly internet companies, saw smaller inflows, the report added.
Chinese policymakers unveiled further measures to improve investment in infrastructure sectors, while planners said they would provide financing for private projects. The sectors most affected included consumer, financial, materials, and industrial.
Global investors have been pulling back from China over the last few months after the country’s economy saw a slower recovery than analysts expected. That was joined by tensions with the United States.
The investment bank said hedge funds’ exposure to Chinese equities was still around the low levels last seen in November 2022 and well below five-year averages. There are now signs that sentiment is picking up with net foreign buying on the mainland. Chinese equities recorded 20 billion yuan this month, their best month since April, official data showed.
