Chinese markets and country-specific exchange traded funds gained momentum Wednesday after Beijing revealed a surge in exports, renewing confidence in the global economy.
On Wednesday, the iShares China Large-Cap ETF (NYSEArca: FXI), the largest China-related ETF that tracks Chinese companies listed on the Hong Kong stock exchange, rose 3.5% while the SPDR S&P China ETF (NYSEArca: GXC) gained 2.7% and broke above the resistance at its 200-day simple moving average. While both funds have increased over 7% in the past three months, FXI is still down 4.6% and GXC is 4.4% lower year-to-date.
Meanwhile, China A-shares ETFs that track mainland Chinese stocks traded in Shanghai and Shenzhen also rallied Wednesday, with the Deutsche X-trackers Harvest CSI 300 China A-Shares ETF (NYSEArca: ASHR) up 1.8%. ASHR has declined 11.6% year-to-date.
Chinese equities were strengthening after Beijing revealed exports in yuan terms jumped 18.7%, or 11.5% in U.S. dollar terms, in March year-over-year, BBC reports. Imports, on the other hand, dipped 1.7%, leaving China with a trade surplus of 194.6 billion yuan, or $30 billion.
The unexpectedly strong export data suggests that the world’s second largest economy may not have done as poorly as previously thought during the global slowdown.
[related_stories]However, traders should take the trade data in with a grain of salt as the extended Lunar New Year Holiday may have caused the export numbers to deviate from the norm.
“The figure still needs to be interpreted with caution as the distortions in February and March often cause wild swings of the exports growth figures. In the first quarter as a whole, exports declined 4.2 per cent year on year,” ANZ Banking Group economists said, according to the Financial Times.
China market observers will be waiting for Beijing to reveal its gross domestic product growth numbers, industrial production and retail sales on Thursday. Many expect China expanded 6.8% for the first three months of the year.
SPDR S&P China ETF