Bloomberg reported that shares of Chinese companies traded on the US stock exchanges showed a sharp rise following trading results on Thursday, December 30.
The Nasdaq Golden Dragon China Index, which tracks the 98 largest Chinese companies listed in the US, rose 9.4% in trading on December 30, its most notable rise since 2008.
“It’s finally time to buy Chinese stocks,” said Vital Knowledge analyst Adam Chrisfulli. He also added that the Nasdaq Golden Dragon Index has returned to levels that have served as solid support over the past several years.
However, investors should be careful as potential regulatory uncertainty remains, said Matt Maley, chief market strategist at investment firm Miller Tabak.
“While the New Year should ease the selling pressure, there is still too much uncertainty for American investors to return to these stocks,” he said.
Despite a one-day rally, Chinese stocks in the US are down about 42% in 2021 and are about 57% below their February highs. In 2021, Chinese stocks faced a sharp crash due to pressure from China and the United States regulators.
The Chinese market has lost more than $1 trillion since February 2021. The Chinese government has tightened high technology, education, real estate, and video games regulation.
Authorities have limited playing time for minors, suspended new video game licensing, tightened privacy requirements, and restricted IPOs and foreign funding for online educational platforms and tutoring companies.
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