China stocks just had their best day in 16 years, sending related U.S. ETFs soaring

Published On Sep 30, 2024, 10:06 AM

Chinese stocks experienced a significant rally, marking the best daily gain in 16 years. The Shanghai Composite surged 8.06%, while the Shenzhen Composite rose by 10.9% after the Chinese government announced economic stimulus measures, including interest rate cuts aimed at boosting the struggling property market. This optimism translated to gains in related U.S. ETFs, with the KraneShares CSI China Internet ETF (KWEB) up 4.2% and the iShares China Large-Cap ETF (FXI) rising 2.2%. Notable increases were seen in various U.S.-listed Chinese companies, like Kanzhun and Bilibili, which also experienced significant gains after the announcement.

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Stock Forecasts

KWEBView KWEB chart on TradingView

Positive

The recent economic stimulus from China, including interest rate cuts, is likely to spur further growth in Chinese markets, leading to increased investor confidence in U.S.-listed Chinese stocks and ETFs. Given the strong performance in both China and the U.S. related markets, continued upward movement is anticipated as investors react positively to the stimulus measures.

FXIView FXI chart on TradingView

Positive

As U.S. investors gain confidence in Chinese equities following the stimulus measures, we can expect sustained interest in investment vehicles that focus on Chinese markets. This could lead to further gains in related ETFs, suggesting a bullish outlook in the near term.

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