China stockmarket the world’s best performing

China is on pace to be the world’s best-performing major stock market in 2019, with the benchmark CSI 300 index up by a third this year as investors shrug off the country’s slowing economy and bruising trade war with the US. Bourses in Shanghai and Shenzhen have added $1.4tn in market capitalisation so far, taking the total value of onshore equities to about $6.8tn this year, buoyed by a revival of domestic investor confidence and continuing international inflows.

The 31% advance by the index of major Shanghai and Shenzhen-listed stocks outpaces the 8.5% rise by the UK’s FTSE 100, the climb of 11.5% by Japan’s Topix and the gain of 22.3% by the US S&P 500. Even after accounting for weakness in China’s renminbi, the country’s stock benchmark is up more than 28% this year in dollar terms. The resurgence follows a dismal 2018, when the CSI 300 fell 25%. That made China the worst-performing major stock market as equities were battered by the intensifying trade war and a deleveraging campaign by Beijing that tightened domestic liquidity. However, Caroline Yu Maurer, head of greater China equities at BNP Paribas Asset Management, said further upside for stocks was probably limited this year, thanks partly to the smaller scope of stimulus planned for the economy.

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