World's Second-Largest Stock Market Is Getting Interesting Again

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The bridesmaids for much of this year as surging Hong Kong-listed stocks stole the glory, mainland Chinese equities have started to pick up again.

The Shanghai Composite Index began moving upward mid-year, and reached its highest level since December 2015 on Monday, while the ChiNext gauge -- a favorite for China’s speculators -- has jumped more than 11 percent from last month’s low. The rising yuan, improved earnings and bets the Communist Party wants strong markets before its congress this fall is luring cash back into the world’s No. 2 equity market by value.

The outperformance in offshore shocks and receding angst over Beijing’s deleveraging drive may be making investors more comfortable about returning to the mainland market, where volatility is near multi-year lows. The ChiNext, home to many of China’s technology shares, is still in the red for this year.

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