Asia Stocks Bounce in Tandem with a China Rebound
2022.11.29 05:37
Chinese markets are rallying early in the session as local investors take a more pragmatic approach to the current COVID proceedings. Indeed, a probable outcome is a quicker loosening of restrictions once the current COVID wave and numerous protest flash points subside.
China markets are perking up to new housing support, a potential rate cut, and speculation that protests may expedite a shift from COVID-zero policies.
There is no doubt many western companies are facing supply chain problems; what is often overlooked is that China is as bullish on companies like Apple (NASDAQ:) as Apple is on China. Hence policymakers need to quell the demonstrations and get people back to work. So far, the limited follow-through in global markets indicates that investors believe Xi will find a way.
And while the heavy police presence may unnerve a Western audience, it effectively returns business as usual. It allows long-term investors to peer down that 6-12 month-looking lens more comfortably. The Chinese economy is expected to display a distinct “two halves” next year, where a brutal winter will give way to above-consensus growth in H2.
