Most of the economic damage caused by the Sino US trade war has been forgotten by investors. Encouraged by the stimulus measures of the Chinese authorities and bold capital market reform actions, they are chasing consumer and technology stocks.
On the last trading day of 2019, China's CSI300 index traded at 4082.56 on Tuesday noon, close to an eight month high, up 35.6% from the beginning of the year. The Shanghai Composite Index. SSEC rose 21.8 percent to 3038.26 this year.
By contrast, the S & P 500. SPX is up 28.5 percent this year, while the Dow Jones industrial average. DJI is up 22.1 percent.
"At the end of 2018, the unprecedented trade war was worrying, and investors sold shares. Now investors are more calm, they know all the cards Washington has, and they are more confident in the Chinese government's countermeasures, "said Wu Kan, head of equity trading at Shanghai Shanshan financial.
But Mr. Wukan warned that sectors such as consumer and technology are already showing signs of overheating and predicted market volatility in 2020.
US President trump formally launched a tariff war against China in 2018, which led to a 25% drop in the Chinese stock market that year and the worst performance in major markets. But China's CSI 300 index rebounded 28.6% in the first quarter of 2019 as investors rushed into battered stocks as China and the United States moved towards a cease-fire in trade wars.
After the impasse in the trade talks, the rebound stopped in early May. China's stock market fluctuates in a relatively narrow range as trade talks continue intermittently. After the two sides reached a temporary agreement to ease trade tensions, China's stock market rose more than 6% this month.
Although China's economic growth slowed this year to the slowest in 30 years due to the trade war, investors were encouraged by the government's stimulus measures, bold market reforms and a large number of foreign capital inflows.
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