Out of nowhere, the Chinese stock market took off, surging more than 3.0 per cent.
This brings the Shanghai Composite back above that 2,000 level.
It’s unclear what’s sparking the rally. But according to CNBC World, there’s some chatter that the Chinese government may be moving to stimulate the economy.
Earlier this evening, we learned that the HSBC China Services PMI slipped to 52.1 in November from 53.5 in October.
“Despite the moderating growth of services activities in November, services providers hired more workers and became more optimistic on future outlook,” wrote HSBC economist Hongbin Qu. “Services sectors’ performance is likely to get a lift from the recovering manufacturing growth, as the filtering-though of policy easing is likely to boost domestic demand in the coming months.”
Overall, the recent economic data out of China has reflected the budding green shoots of a an economy that’s accelerating again.
In a recent note to clients, Bank of America economist Ting Lu made an effort to explain why Chinese stocks had performed so poorly this year. He wrote: “Very often the sentiment-driven A-share market is a barometer for Chinese investors’ mass psychology instead of the real economy.”
Perhaps that sentiment is finally turning.
Hong Kong’s Hang Seng index is up a solid 1.1 per cent. Elsewhere in Asia, markets are up modestly.
Japan’s Nikkei is up 0.1 per cent.
Korea’s Kospi is up 0.3 per cent.
Australia’s S&P/ASX is up 0.3 per cent.
Here’s a look at the Shanghai Composite courtesy of Bloomberg: