A U.S.-listed exchange traded fund that invests in Chinese stocks jumped more than 5% on Monday as China’s financial markets reopened after closing last week for the National Day holiday.
The iShares FTSE/Xinhua China 25 Index Fund (NYSEArca: FXI) gained 5.3% on Monday while the iShares MSCI Hong Kong Index Fund (NYSEArca: EWH) added 4%.
China’s Hang Seng Index fell to its lowest close since May 2009 earlier this month. Any perceived weakness in the Chinese markets will be closely looked at as China is considered a major driver of the global economy.
“When the macro environment is bad, it negatively affects the micro environment in Hong Kong,” Francis Lun, managing director at Lyncean Holdings Ltd., previously stated, reports Bloomberg. “Investors are trying to get out of the stock market and wait for it to bottom out.”
However, the index gained traction Thursday and continued to pickup momentum on Friday, trading up 3.1% on the day and almost 9% higher in two days, reports Clement Tan for Reuters.