Chinese stocks and exchange traded funds (ETFs) are hitting record highs today, led by gains in banks with strong earnings forecasts. The benchmarks Shanghai Composite Index and the Shenzhen Composite Index both rose 1%, the Associated Press reports.

The main cause behind the record highs was the China Merchants Bank’s forecast from Tuesday that its net profit for the January-September period probably more than doubled year-on-year, according to analysts. China Merchants rose 2.3%, the Bank of China jumped 7.7% and the Bank of Nanjing rose 8.1%. Another factor that could be influencing China’s upward trajectory is the anticipated deal that will allow domestic Chinese investors to invest in Hong Kong’s markets, which generally are cheaper. Below are the ETFs that benefit from the news along with their performance year-to-date:

  • iShares FTSE/Xinhua China 25 Index (FXI) – up 78.6%
  • PowerShares Golden Dragon Halter USX China (PGJ) – up 70.4%
  • SPDR S&P China (GXC) – up 41.0% for the last three months, having launched in March



The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.