Sudden Rally in China Stocks Has Traders Scratching Their Heads
- Key gauges in China and Hong Kong rebound from oversold levels
- People “quite baffled” by the move, says Chen of Forsyth Barr
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Chinese stocks staged a sudden rally late on Tuesday, with several traders attributing the rebound to technical reasons in the absence of any fresh triggers.
In Hong Kong, the Hang Seng Index climbed nearly 2% within minutes, after a seven-day losing run that was the longest since late 2021. About half of the stocks in the index were oversold according to one technical indicator as of Monday, the highest ratio since March 2022. The CSI 300 Index, benchmark for mainland shares, finished up 0.8% after erasing a loss of as much as 0.7%. The gauge was the most oversold since early June on Monday.