CSI 300 and Hang Seng: Goldman Sachs sees 20 percent potential: Risky hopeful rally in China stocks

Cologne Is this the long-awaited rest? The CSI 300 index, which tracks the 300 most important Chinese companies on the mainland stock exchanges, has gained almost eight percent since the beginning of November. Hong Kong SAR’s Hang Seng Index was up more than 18 percent.

The reason for the rally is speculation that Beijing will abandon its strict zero-Covid policy. The associated rigorous lockdown measures against every single coronavirus disease are crippling the economy and disrupting supply chains.

Goldman Sachs economists expect that China’s government could relax its regulations in the second quarter of 2023 and speak of an upside potential for Chinese stocks of 20 percent. This has fueled optimism among investors of late, despite weak economic data and concerns that China could prioritize its leader’s political ideology over economic pragmatism going forward.