Despite the global weakness, Chinese A-shares market and country-specific exchange traded funds (ETFs) rallied Tuesday on speculation Beijing would back the equities market.
The Market Vectors ChinaAMC SME-ChiNext ETF (NYSEArca: CNXT) and Deutsche X-trackers Harvest CSI 500 China A-Shares Small Cap Fund (NYSEArca: ASHS) led gains Tuesday, rising 2.3% and 2.4%, respectively. The China A-shares ETFs track more middle capitalization-weighted companies. Nevertheless, CNXT is still down 20.1% and ASHS is 19.3% lower year-to-date.
Meanwhile, the db X-trackers Harvest CSI 300 China A-Shares Fund (NYSEArca: ASHR), the largest China A-shares-related ETF, rose 0.9%. ASHR declined 14.4% year-to-date.
Market observers argued that Chinese traders were encouraged by President Xi Jinping’s after-market hours call to maintain a “healthy development of the stock market,” reports Dominique Fong for MarketWatch.
Xi chaired a Communist Party Politburo meeting of Chinese leaders who urged “strengthening market supervision and protecting investor interests,” according to a state official media.
The comments drew investors’ attention as top leaders rarely show public support of the equities market.