A- share market outperforms Wall Street in Jan- Jun

Chinese shares continued their Vshape recovery on Thursday, the last trading day of the first half of 2022, with the Nasdaq- style ChiNext recording the biggest monthly gain in almost two years and the CSI 300 index closing to enter a bull market, as investors’ confidence on the entrenched recovery of the world’s second- largest economy is further boosted by a batch of policies that are expected to speed up recovery and drive up consumption.

The benchmark Shanghai Composite Index extended its gains into a fifth week, closing 1.1 percent higher at 3398 points on Thursday, while the Shenzhen Component Index and the ChiNext edged up 1.57 percent and 1.52 percent, respectively. The CSI 300 index closed 1.44 percent higher Thursday, gaining over 19 percent from an April low.

Chinese stock market started rebounding around May and become one the best- performing major capital markets in the world, as many foreign markets were in a sell- off mode. In June alone, the Shanghai index has rebounded about 7 percent, and the ChiNext jumped 16.86 percent, marking its biggest monthly gain in almost two years.

In the first six months of June, China’s benchmark Shanghai Composite Index plunged 6.63 percent, a relatively mild drop compared with other major markets.

In the first half, the Dow Jones index plunged over 14 percent as of the close on Wednesday, the S& P 500 dived around 20 percent, and the NASDAQ sank around 28 percent.

US stocks have plunged into a bear market, triggering widespread concerns on whether there will be a recession amid deteriorating US economic prospects, mounting inflation fears and the Federal Reserve’s further interest rate hikes.

“The V- shape recovery of Chinese equities is independent of the situations in other major capital markets, mirroring investor’s restored confidence on the prospects of the Chinese economy as the epidemic eased in major cities,” said Yang Delong, chief economist at Shenzhen- based First Seafront Fund Management Co.

Chinese authorities have issued a series of policies that shorten quarantine time for inbound international travelers and relaxed cross- provincial travel restrictions, a boon for the tourism industry that further channels optimism into the market.

“It shows that Chinese policymakers have been carefully exploring how to strike a balance between epidemic control and economic growth. It is expected that policies will be adjusted further to minimize the impacts of COVID- 19 measures on the economy,” Yang said, adding that such uncertainty also reinforces market sentiment. The gains on Thursday were led by the consumption sector, including baijiu, hotel and tourism, airports and aviation, as well as food and processing.