The effect on A-shares from U.S. President Donald Trump’s Twitter tariff announcements are waning, said «Global Times» citing improved investor confidence and over-exaggerated economic expectations.
«US President Donald Trump's tariff hike announcements for China, often made on his personal Twitter account, are gradually losing their impact on A shares as the Chinese mainland capital markets have grown increasingly immune to news about the trade spat, while such news often causes quite a storm on US stock markets,» the report said, citing experts such as Xi Junyang, economics professor at Shanghai University of Finance and Economics.
«This shows that Chinese investors are becoming more confident, as they found that the trade war didn't affect the nation's economy as much as they had anticipated. Investors in the US, on the other hand, have started to feel panicky about the negative impact of the dispute, which they didn't care too much about in the beginning.»
Real Demand
According to Global Times, a stock investor surnamed Dai said that she is now accustomed to sudden tariff hikes and views them as «normal trade negotiation proceedings».
The report also cites a Weibo post from Li Daxiao, chief economist of Shenzhen-based Yingda Securities, that said that «as overseas capital poured into the Chinese market, mainland capital also slowly woke up», adding the A-share market’s resilience is becoming «more and more evident».
In addition to capital demand, regulatory support was also highlighted as evidence of improved investor sentiments. According to Yang Zirong, an associate research fellow of the Institute of World Economics and Politics of the Chinese Academy of Social Sciences, authorities continue to provide policy support, citing a recent CSRC (China Securities and Regulatory Commissions) meeting to discuss capital market reforms which he believes «injected confidence into the markets».
