As China’s leaders convene for the annual National People’s Congress (NPC), the biggest political gathering of the year, investors are cautiously optimistic. They are betting that the country’s stock market may finally break a five-year losing streak on the first day of the event.
The MSCI China Index has consistently dropped on the first trading day of the NPC for the past five years, with declines ranging from 0.3% to 4.5%. However, a wave of optimism has washed over the market, driven by renewed hope for the nation’s technology sector and the private sector in general. This has altered the previous pattern.
The index has already seen a 21% increase since hitting a low in January, and investors believe there are further gains to be made. This positive sentiment suggests a potential shift in market behavior, as investors anticipate policy announcements and economic strategies that could benefit specific industries, particularly those related to artificial intelligence (AI) and other technological advancements.
