Chinese equities have staged a dramatic comeback in the past few weeks on the back of policy stimulus, with the MSCI China Index, tracked by the iShares MSCI China ETF (NYSE:MCHI), surging over 35% between Sept. 24 and Oct. 7.
This “fast and furious” rally, as described by Bank of America analysts Winnie Wu and Willie Chan, outpaced the performance of other major markets globally and more than doubled the year-to-date gains of the S&P 500, as tracked by the SPDR S&P 500 ETF Trust (NYSE:SPY).
The rally has been driven by a series of aggressive monetary easing policies unveiled by Chinese authorities, alongside renewed government commitments to stabilize the country’s troubled property sector.
Year-To-Date Performance: MSCI China Doubles S&P 500
Chart: Benzinga Pro
A $2 Trillion Market Surge
From Sept. 23 to 30, the MSCI China Index added nearly $2 trillion in market capitalization. Some of the largest beneficiaries were blue-chip companies like Kweichow Moutai, which jumped 39% (adding $88 billion in market cap), Tencent Holdings ADR (OTC:TCEHY), which climbed 15% (adding $70 billion) and Alibaba Group Holding Ltd. – ADR (NYSE:BABA), which surged 27%, increasing its market value by $58 billion.
This rapid market appreciation reflects growing optimism among ...
