Chinese Stocks Surge Amid Institutional Support and Retail Return
Chinese stocks have reached decade highs due to support from state and institutional investors, despite China's sluggish economic recovery. Analysts attribute the rally to low valuations and potential retail shifts from low-yielding deposits. The Shanghai Composite Index has risen about 25% since April.
- Country:
- China
In a remarkable financial rally, Chinese stocks have hit their highest levels in a decade, spurred by robust backing from state and institutional investors. Retail investors are gradually returning to the market, contributing additional momentum despite China's broader economic challenges.
Experts cite relatively low stock valuations and significant unused capital as key driving forces behind the persistent market surge. The ongoing trend suggests a strategic shift from low-yield deposits into equities, with the Shanghai Composite Index climbing approximately 25% from its lows in April.
This upward trajectory is further highlighted by record margin financing levels and increased equities investments by Chinese insurers, mutual funds, and ETFs. However, retail and international investors have shown restraint, indicating substantial untapped potential for future investment influx.
(With inputs from agencies.)
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