China ETFs Look Optimistic Ahead of Trade Talks

“The securities regulator is said to have held a closed-door meeting with analysts, that may have fueled expectations there’ll be some moves to stabilize the market,” Yip told Bloomberg.

Chinese equities have plunged into a bear market since the January highs due to a variety of factors, including Beijing’s deleveraging campaign and its impact on liquidity, a trade dispute with the U.S., a depreciating yuan currency and signs of a slowing economy.

Year-to-date, the iShares China Large-Cap ETF (NYSEArca: FXI) declined 8.9% and Xtrackers CSI 300 China A-Shares ETF (NYSEArca: ASHR), which tracks mainland Chinese A-shares, plunged 21.2%.

“Authorities certainly don’t want to see stocks slide further, valuations at current levels appear attractive, though it would be hard to revive sentiment on the market,” Shen Zhengyang, a strategist with Northeast Securities Co., told Bloomberg. “The trade negotiations that are dragging on will continue to cloud the market outlook.”

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