China Stocks Burst Into Bull Market: 5 Picks
Zacks Investment Research | Feb 25, 2019 08:56PM ET
On Feb 25, China stocks officially entered the bull-market territory with major indexes registering record gains. Chinese investors indulged in profit-taking on Feb 26 after registering phenomenal gains. While naysayers expressed doubts over the current rally, optimists think that this minor correction is the ideal entry point for investors.
The major catalyst for Monday’s gains was President Trump’s decision to postpone additional tariffs slated to be levied on $200 billion of Chinese imports starting Mar 1. Further, China’s government is implementing stimulus and undertaking wide ranging reforms to rejuvenate its economy. These factors make it the ideal time to invest in China stocks to capitalize on the ongoing rally.
Shanghai Composite, CSI 300 Enter Bull Market
On Feb 25, the Shanghai Composite gained 5.6%, its best single-day percentage advance since June 2015. At that point, shares had gained 20% from their Jan 3 low, perfectly matching a popular definition of a bull-market. The small-cap Shenzhen Composite added 5.6% while the large-cap CSI 300 increased 6%, also entering the bull-market territory.
China stocks have notched substantial gains in 2019 with the Shanghai Composite up nearly 18% year to date. However, the immediate catalyst for these gains was Trump’s tariff postponement decision.
Further, the U.S. President is set to meet his Chinese counterpart at the end of March to seal a long-lasting trade deal. (Read: Original post
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