The recent surge in China’s onshore equity markets has been marked by significant volatility, underpinned by the government’s cautious approach to economic stimulus and market management. In early October 2024, the CSI 300 index surged more than 10% following the week-long National Day holiday. However, after a highly anticipated press conference by the National Development and Reform Commission (NDRC), where no new stimulus measures were announced, markets relinquished some of their earlier gains. Despite this pullback, the market’s overall rally should continue, driven by shifts in market expectations initiated by policymakers in late September.
Market Dynamics Post-Holiday
The CSI 300 index’s early October surge of over 10% was significant, but the initial enthusiasm was tempered by the NDRC’s press conference, which did not introduce any new stimulus measures. Instead, NDRC Chairman Zheng Shanjie reiterated familiar commitments from previous Politburo meetings, emphasizing efforts to boost domestic demand, prevent further deterioration in the property sector, and strengthen capital markets. Notably, he confirmed the issuance of ultra-long special treasury bonds in 2025 and reiterated the implementation of more policies to support businesses. The market, initially buoyed by expectations of more aggressive stimulus, reacted with some disappointment. The CSI 300 ended the day up 5.9%, while the Hang Seng China Enterprises index experienced a sharper decline of more than 10%, likely driven by profit-taking after the holiday gains.
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