Chinese Stocks Gain Amid Improving Economic Numbers

Tuesday, 08 Oct 2013 07:57 AM

By Dan Weil

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Chinese stock prices are on the upswing, as the economy shows signs of faster growth.

Chinese home prices rose for the third straight month in September, according to a private-sector survey, The Wall Street Journal reports. Meanwhile, the official purchasing managers' index hit a 17-month high in September.

Some experts predict China's economy accelerated last quarter from the second-quarter growth rate of 7.5 percent.

Editor’s Note:
5 Reasons Stocks Will Collapse . . .

"People have been surprised by how good things have gotten, but China's turnaround is real," Sameer Samana, senior international strategist at Wells Fargo Advisors, tells The Journal.

The Federal Reserve's decision last month to refrain from tapering its quantitative easing also has boosted Chinese stocks.

China-oriented stock mutual funds and exchange-traded funds gained 11 percent, on average, during the third quarter, compared with a 5 percent return for diversified emerging-market funds, according to Morningstar data.

"As one of the biggest laggards in emerging markets over the past two years, investors can expect to see more upside in China in the fourth quarter," Fan Cheuk Wan, chief investment officer at Credit Suisse Group's Asia-Pacific wealth management division, tells The Journal.

The Shanghai Stock Exchange Composite Index has gained 11 percent since June 24 to 2,174.67.

"Market sentiment has been recovering slowly from its trough in late June," Barclays economist Jian Chang told CNNMoney.

"Economic data has been stronger than expected."

To be sure, not everyone expects China's economic rebound to continue. It will likely peter out by early next year, Nomura economist Zhiwei Zhang tells CNNMoney.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

Related Stories:

China Reassures Neighbors Over Economy, Reforms

World Bank Cuts China, East Asia Growth Forecasts

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