Eoin Treacy's view -
The Nasdaq Golden Dragon China Index rallied 9.4%, its largest climb since 2008. Electric-vehicle maker Nio Inc. and Tencent Music Entertainment Group were among some of the best performers Thursday, climbing 15% each. Alibaba Group Holding rose 9.7%, while Tal Education Group advanced 15%.
“It’s finally time to buy Chinese equities,” Vital Knowledge analyst Adam Crisafulli wrote in a research note. The Nasdaq Golden Dragon China Index is back at levels that have acted as solid support going back over the last several years, he said.
U.S.-listed Chinese stocks have experienced a brutal selloff in 2021 as regulators in Beijing mounted a sweeping crackdown on the nation’s companies. That rout erased more than $1 trillion in value since February as authorities in the U.S. and China continued to put pressure on the firms. Despite Thursday’s rally, the group is still down about 42% this year and about 57% lower from its February peak.
The Golden Dragon China Index had a dismal 2021. It was dragged lower by fears of nationalisation of China’s champion companies, the equivalent of a seismic event in the regulatory environment and the threat of shares needing to delist from US exchanges. That all occurred against a troubling backdrop of deteriorating sentiment that the trade war will ever end.
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