US Markets Become Recipient Of Hot China Bank Rally
US president Donald Trump might try taking cues from the Chinese market, which is currently up 39% year-to-date. The CSI 300 Index is up 36% in US dollar terms, making triple of the Dow Jones' 13% gain. Asia Times reported that this could help the US president in his reelection aspirations in 2020, despite tagging China as 'the enemy.'
Trump has repeatedly applauded China's stock market plunge in an effort to appeal to the American masses. It was also vindication that most of his policies--most notably the trade spat which was supposed to 'force' the Chinese to agree to trade agreements in favor of US policies. However, the US government couldn't have foreseen the challenges facing them.
The US government experienced a stock market crash during the fourth quarter last year and heaped blame on the Federal Reserve. It claimed that the Fed's 'stringent' measures had the Dow Jones Industrial Average losing 5,000 to 10,000 points. Now that the Chinese Index had risen, it is the US that is currently taking notes on how to diminish its slide.
How significant is it that the China banks rallied to their cause? Well, the chart has shown how these banks' percentage changed. According to Mena FN - Asia Times, the developments have show changes by as much as 4 percent. China Citic Bank lagged behind by 2 percent, while Bank of China rallied to as much as almost 3 percent.
The most significant movers are Industrial Commercial Bank and China Construction Bank, which posted values of 3 percent and almost 4 percent, respectively. The changes happened over an impressive period of 24 hours, marking the jump made in all of the mentioned banks in the list. The list came from the Hang Seng China Enterprises Index.
China Construction Bank completed the gain within only one day. Bankers have also watched out for another month of increase in the 70-cities index, where new home prices moved up by 0.61% in March. These are good indicators which showed that despite the challenges thrown by the US, whatever stimulus the Chinese government is doing is working.
The trend in the US is best typified by how the Bank of America handled its surprising rise. The bank warned its investors that 'net interest margins' wouldn't show any significant changes. However, what happened was that--at the end of the day--the bank, and many others in the list, moved up.