SHANGHAI: Patience is wearing thin among China’s beleaguered stock investors as worries about the impact of the latest Covid upsurge eclipse promises of official market support.
(March 6): China’s most-shunned sector is getting a rare moment in the sun as investors seek shelter from a rout in the market’s darlings.
The CSI 300 Banks Index has climbed 12% this year and is trading near the highest since 2007 even as price-to-book valuations remain at just over half of its 14-year average. Liquor maker Kweichow Moutai Co., a favorite among investors, is down 21% from a February peak, with 30-day volatility at a two-year high.
Appetite for Chinese bank stocks, long regarded as perennial laggards, is growing as investors hunt for cheaper parts of the market to escape lofty valuations in growth shares spurred by liquidity-fueled gains this year. That also comes as investors recast expectations for the year amid a surge in U.S. sovereign bonds that’s sent global bank shares higher.
China Stocks Drop on Concern Over Highest Valuations in Years
Bloomberg News, Bloomberg News Morning commuters wearing protective mask ride an escalator in the Lujiazui Financial District in Shanghai, China, on Friday, Oct. 9, 2020. Chinaâs yuan strengthened and stocks rose on mainland exchanges in a positive start to the month for traders returning to work after an eight-day holiday. Photographer: Qilai Shen/Bloomberg , Bloomberg
(Bloomberg) Chinese stocks fell the most in almost three weeks, as investors questioned whether the highest valuations in 13 for the CSI 300 Index make sense.
The stock benchmark fell 1% at the close on Monday after hitting its highest level since 2008 last week. A measure of consumer staples was among the worst performers on Monday after surging 23% last quarter, the most since early 2019.