BlackRock’s ‘Overweight’ Endorsement Fuels China’s Stock Frenzy: Hang Seng Index Skyrockets 6.2%, Pushing Cumulative Gains to $3 Trillion after Beijing’s Record-Breaking Stimulus

The Hang Seng Index surged by 6.2% due to Blackrock's 'overweight' prediction causing a rush in Chinese stocks. Shares climbed for the sixth day in a row, with cumulative gains reaching US$3 trillion following Beijing's announcement of its largest stimulus package in this period.

The Hang Seng Index saw a significant increase of 6.2% on Wednesday, reaching its peak since January 2023, which resulted in a six-day total growth of 23%. The Tech Index also experienced a substantial rise of 8.5%. A measure following Chinese stocks listed in the US witnessed a 5.5% boost in New York on Tuesday. Meanwhile, the markets in mainland China remain shut this week due to a holiday.

The Hang Seng Index saw a massive surge of 1,310 points today, marking the largest one-day increase since March 2022. The total trading volume reached HK$434 billion. This happened even though the Stock Connect program, which connects the market with those in Shanghai and Shenzhen, was not operational.

The six-day surge has replenished over $770 billion in market value, accumulating a total of $3 trillion since China launched its largest stimulus package to halt the downturn in the property and stock markets. According to Bloomberg's estimates, China has regained the largest proportion of the MSCI Emerging Markets Index at 27.8%, compared to 24.4% in August.

BlackRock strategists have identified potential for a slight increase in the value of Chinese stocks in the immediate future. This is due to their almost historic low cost compared to shares in developed markets, even considering their recent rise. They also shared in a Tuesday note that there might be additional financial stimulus on the horizon, which could incite more investors to make purchases.