China markets surge in wild end to the quarter

livemint.com:

Subscribe to enjoy similar stories. A major injection of economic stimulus in China drove gains in stocks from Beijing to New York at the end of the quarter. Some investors say what happens there could be key to markets’ direction in the months ahead.

The Shanghai Composite Index surged 8% on the final day of trading Monday, its biggest daily jump since 2008. The 17% gain in the final month of the quarter was its biggest monthly climb since China’s notorious 2015 stock market bubble. The September performance erased several months’ losses for the index.

China’s ailing economy has dragged on stocks in recent years, fueling capital flight and pushing smaller investors toward safer assets. Investors cheered Chinese officials’ promises of greater economic support. Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, wrote that the policy shift could be a “game-changer for Chinese risk assets." With interest rates already coming down and U.S.

stock indexes trading near record highs, some think a rebound in China could fuel the next leg of the rally. Another barrage of stimulus landed over the weekend, when the central bank directed lenders to cut interest rates for existing mortgages and two major cities lifted curbs on home buying. Yet many remain concerned the boost will prove insufficient to alleviate strains on the world’s second-largest economy.

China is a global manufacturing hub and the world’s largest consumer of commodities. Problems there tend to spill elsewhere. Here’s a look at what investors are tracking as the new quarter opens: In the U.S., securities of Chinese e-commerce companies Alibaba, PDD’s Pinduoduo and JD.com all rose in recent days.