![]() Virtually all investors in mainland stock markets are individual traders, according to recent survey data from the China Securities Depository and Clearing Corporation.īut the rally is significant for what it says about how eager the country is to project an image of a healthy stock market to the rest of the world, particularly as it comes under an increasing level of international scrutiny over its handling of the coronavirus outbreak and the implementation of a sweeping national security law in Hong Kong. Goldman Sachs this week predicted the CSI 300 - an index of big cap stocks in Shanghai and Shenzhen - would rise another 15% within the next few months, which the analysts attributed to a “robust economic reopening” and “positive government rhetoric towards the equity market,” among other factors.Ĭhina’s stock markets are not open in the way other major international exchanges are. International onlookers are noticing the surge. Trading volume exploded, with daily turnover soaring nearly 80% compared to last week. By Friday, the index had closed out its best week in five years. (SHCOMP) Index stormed into a bull market to start the week as Chinese state media called on local investors to pour money into markets, assuring them that the economy is recovering from the coronavirus pandemic and the country is headed for a period of great prosperity. In particular, we find that sectors most affected by tariffs such as information technology related ones are particularly sensitive to the tone in trade tension.China’s stock markets have been on an absolute tear. No equity market benefits from the China-US trade war, and Asian markets tend to be more negatively affected. Most of the contribution is given by the tone extracted from social media (9%), while that obtained from traditional media explains only a modest part of stock price variability (1%). We find the TSI to contribute around 10% of model capacity to explain the stock price variability from January 2018 to June 2019 in countries that are more exposed to the China-US value chain. We develop a novel trade sentiment index (TSI) based on textual analysis and machine learning applied on a big data pool that assesses the positive or negative tone of the Chinese media coverage, and evaluates its capacity to explain the behaviour of 60 global equity markets. Trade tensions between China and US have played an important role in swinging global stock markets but effects are difficult to quantify. The TSI accounts for about 10% of the model's capacity to explain stock price movements in countries significantly exposed to the China-US value chain, with social media accounting for the majority of the sentiment (9%) and traditional media only modestly (1%). In particular, we find that sectors most affected by tariffs – such as those related to information technology – are particularly sensitive to the tone in trade tension. No equity market benefits from worsening China-US trade sentiment, and Asian markets tend to be more negatively affected. Third, we disentangle the stock market effects of trade sentiment deriving from social media (ie media articles on the web, forums and multi-purpose social media platform WeChat) from those from traditional media (ie newspapers and magazines). Second, we analyse the effects of the China-US trade sentiment on stock market prices at the country, sectoral and firm level during the period January 2018–June 2019. ![]() First, we introduce a new trade sentiment index (TSI) that captures, in a more continuous fashion, the tone regarding trade in Chinese media, and examine its ability to explain the behaviour of global stock markets. We contribute to the literature in three ways. ![]() For this reason, the literature has thus far mainly analysed case studies that refer to specific episodes with a time horizon of just a few days. News items related to tariffs and other factors, including trade barriers between the two countries, have made the analysis of these effects particularly challenging. Trade tensions between China and the United States have created volatility in the global stock market in recent years, but their effects are difficult to quantify. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |