The markets in China are up by more than 30% so far this year. The Shanghai composite had jumped by over 30% since the end of 2018 and the Shenzhen component has rallied by more than 40%. Despite the weak finish to last year, China’s stock markets have been on a bull run so far in 2018. This comes during a period of optimism about potential trade deals with the United States.
China Compared To The US Markets
Compared to the other averages like the Dow Jones Industrial Average and S&P 500, which have risen 13% and 15%, the Chinese markets are outpacing the US by more than double. This comes after these same Chinese markets experienced the worst performance in a decade. The Shanghai composite closed the year on a low note with a decline of roughly 25$ compared to 2017.
What has helped boost Chinese stocks has had much to do with the economic turn around as it would seem. Beijing reported on Wednesday that it saw better than expected economic growth for Q1 of 2019. This comes after months of worry about a global economic slowdown lead by China. The most recent GDP figures show the Chinese economy grew by more than 6% year over year during the first 3 months of 2019. This beat the 6.3% expectation from the Street.
What Will The Future Hold For China?
“We’ve started to see retail investors in China feel a little bit more optimistic but they’ve been busy trying to just take their money back after a terrible year in 2018, so the money is not really at work at the moment,” Tai Hui, Asia-Pacific chief market strategist at J.P. Morgan Asset Management, on CNBC’s “Street Signs” on Wednesday.
It also helps as optimism continues to grow. Beijing may be on the verge of coming to an agreement with the United States. The slew of massive tariffs from both economic giants was thrown about during 2018. This initially caused more worry and triggered large market sell-offs before the New Year.