The rebound is on! Chinese stocks set for best week in over a year
Chinese stocks are set to record their best week of performance in more than a year after yet another signal that the Chinese Government’s regulatory reins are being loosened.
On Wednesday, China’s National Press and Publication Administration announced the approval 60 new video games. It’s a stark turnaround from the hard-line approach the Government was taking on the video gaming industry in 2021, which included restricting the amount of time children were allowed to spend playing video games.
The news led to a third consecutive day of gains for Chinese stocks.
At the close of trading in Asia on Wednesday, the CSI 300 index finished up around 1%, while the Hang Seng closed around 2% higher.
The trading on Wednesday followed the strong buying of Chinese tech on Monday and Tuesday after state media reports emerged stating that Chinese regulators are concluding their investigations into ride sharing company, DIDI (NYSE: DIDI).
Chinese stocks rebound “in early phase”
Singapore-based analyst at DrWealth, Alvin Chow, says it appears the Chinese stocks rebound is now well and truly in progress.
“China tech stocks have been quietly recovering ever since May 2022, where Vice Premier Liu He said that the regulations were about to end. The promise was kept as there were no new measures imposed,” said Chow.
“I think this rebound is still in its early days. If you look at their stock charts, the prices remained way below their all-time highs. There are a lot of ground to cover and resistances to break – it won’t be easy as I believe many investors are waiting to sell.
“Nonetheless, I think the rebound has finally come for China stocks after 1.5 years.”