- A-Share fund fell 1.3% in New York after local trading resumed
- Historical volatility rose to 30% from seven-month low of 9.8%
The biggest U.S.-listed exchange-traded fund tracking China’s mainland stocks fell from a seven-week high on Thursday as investors weighed the prospect for additional stimulus policies against the backdrop of a slowdown in the economy.
The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF slipped 1.3 percent to $34.06 in New York, paring an advance over the past week as traders had boosted bets that the latest government effort to bolster growth and the postponement of a U.S. rate increase would fuel a rally in mainland stock markets when they reopened after a break. The fund’s five-day historical volatility rose to 30 percent from a seven-month low of 9.8 percent on Oct. 1 as Chinese equities opened with less exuberance than some investors had expected.
Chinese shares traded outside the mainland had been among the biggest gainers globally during the week-long holiday as investors speculated the government will take more steps to boost the world’s second-biggest economy. Policy makers are increasing targeted stimulus as five interest-rate reductions since November failed to reverse an economic slowdown. The authorities lowered a property down-payment requirement for the first time in five years on Sept. 30 after cutting a tax on passenger-vehicle purchases.
“You’re going to see a lot of this sort of choppiness up and down,” Wayne Lin, money manager at QS Investors LLC, said by phone on Thursday. “There’s not absolute clarity with what’s going on with commodity prices, with whether or not China’s going to ease, with whether or not the Fed’s going to raise rates.”
The Bloomberg China-U.S. Equity Index fell 0.4 percent after reaching an eight-week high on Wednesday. The Shanghai Composite Index climbed 3 percent to 3,143.36 at the close on Thursday, completing the steepest advance in three weeks following the resumption of trading, while Hong Kong’s Hang Seng China Enterprises Index dropped 1 percent after gaining 11 percent during the mainland break.
The Deutsche A-share ETF advanced 8.7 percent between Sept. 28 and Oct. 7 as traders cut short-sale bets on the fund to a seven-month low. The Bloomberg index of Chinese stocks jumped 14 percent during the period. The MSCI All-Country World Index posted its biggest six day gain since 2011 while China’s markets were closed as traders pushed back estimates for when the U.S. will raise borrowing costs.
Melco Crown Entertainment Ltd. fell 2.5 percent to $18.02 on Thursday, ending its four-day gain. Travel service providers Qunar Cayman Islands Limited and Ctrip.com International lost more than 2.5 percent. Alibaba Group Holding Ltd. advanced 2.1 percent to the highest since Aug. 28.