According to a report from the Wall Street Journal,investors are turning their focus back to China, after months in which global markets were driven by relentless speculation about the U.S. Federal Reserve's next move.
Shares are climbing across Asia, and prices for industrial commodities such as copper and iron ore have bounced back amid signs that China's economy is revving up. The yuan regularly sets record highs against the dollar as cash floods into the country.
Emerging-market stocks and bonds shuddered and gold prices jumped last week as borrowing costs soared in China's money market, raising fears of a cash crunch for banks. Some investors worry that official efforts to avoid a debt bubble and keep a lid on inflation could stifle growth—fears that sent Shanghai's stock market and global commodity prices tumbling earlier this year.
The willingness to take another chance on Chinese stocks and on other markets tightly linked to the country's economy underscores the paucity of attractive options available. Global growth continues to be soft, while hefty central-bank support for Western economies has resulted in near record prices in many stock and bond markets.
The benchmark Shanghai Composite index has rallied 15% off of this year's low in late June to end Friday at 2132.96, although it is still down 6% on the year. In Indonesia, which counts China as a major customer for its commodities, the Jakarta Stock Exchange Composite Index is up 12.7% this month. Prices of copper, for which China makes up 40% of global demand, are up nearly 9% since hitting a three-year low in June, ending last week at $7,180 a metric ton on the London Metal Exchange.
"You began to see data that told you things weren't as bad as everyone thought," said Catherine Raw, portfolio manager at BlackRock Inc.'s Commodities Strategies Fund, which oversees $420 million. "The fears that China was going to have a hard landing…have disappeared."
Still, jitters abound, mostly centered on China's lending market. The Shanghai Composite fell 2.8% last week, and global commodities prices dropped as well after Chinese banks' funding
costs shot up.
It also brought to the forefront lingering worries about an explosion of debt, especially of lending to local governments. These loans could reach 30 trillion yuan ($4.9 trillion), equal to 60% of gross domestic product, according to some estimates.
Shares are climbing across Asia, and prices for industrial commodities such as copper and iron ore have bounced back amid signs that China's economy is revving up. The yuan regularly sets record highs against the dollar as cash floods into the country.
Emerging-market stocks and bonds shuddered and gold prices jumped last week as borrowing costs soared in China's money market, raising fears of a cash crunch for banks. Some investors worry that official efforts to avoid a debt bubble and keep a lid on inflation could stifle growth—fears that sent Shanghai's stock market and global commodity prices tumbling earlier this year.
The willingness to take another chance on Chinese stocks and on other markets tightly linked to the country's economy underscores the paucity of attractive options available. Global growth continues to be soft, while hefty central-bank support for Western economies has resulted in near record prices in many stock and bond markets.
The benchmark Shanghai Composite index has rallied 15% off of this year's low in late June to end Friday at 2132.96, although it is still down 6% on the year. In Indonesia, which counts China as a major customer for its commodities, the Jakarta Stock Exchange Composite Index is up 12.7% this month. Prices of copper, for which China makes up 40% of global demand, are up nearly 9% since hitting a three-year low in June, ending last week at $7,180 a metric ton on the London Metal Exchange.
"You began to see data that told you things weren't as bad as everyone thought," said Catherine Raw, portfolio manager at BlackRock Inc.'s Commodities Strategies Fund, which oversees $420 million. "The fears that China was going to have a hard landing…have disappeared."
Still, jitters abound, mostly centered on China's lending market. The Shanghai Composite fell 2.8% last week, and global commodities prices dropped as well after Chinese banks' funding
costs shot up.
It also brought to the forefront lingering worries about an explosion of debt, especially of lending to local governments. These loans could reach 30 trillion yuan ($4.9 trillion), equal to 60% of gross domestic product, according to some estimates.
