Over the last week, global investors had injected a whopping $12.7 billion into emerging markets’ equity funds and debts, suggesting a tantalizing influx of fresh capital in response to an ease in China’s Covid-19 policy, data from the Bank of America research had unfurled later last week. In the matter of the fact, an abrupt reopening of Chinese economy had led to a policy switch from a flurry of investors across the globe, while the Bank of America research had unfurled that market participants are boosting up their emerging market portfolios on a wide array of asset classes ranging from commodities to mining stocks to currencies On top of that, since China’s reopening following a three-year long contemptuous zero-Covid policy would highly likely to lure in a number of tourists, stocks exposed to “travel and tourism” have witnessed a mass-scale influx.
Emerging markets witness record influx after China reopening
Citing data from the Bank of America research, Hong Kong’s benchmark index, Hang Seng had closed out the Friday session at a six-month high ahead of the Lunar New Year Holiday, while the flabbergasting reaction from market participants followed a resumption of travel between Hong Kong and mainland China.
Breaking off the data, last week had viewed an influx of $14.4 billion in bonds, $7.5 billion in equities alongside a $0.6 billion in cash and a $0.6 billion in gold. Apart from Mainland China and Hong Kong, European equities had experienced their first weekly inflow in almost a year, while global investors had poured a $0.2 billion into European equities.
Meanwhile, reflecting on a growing uncertainty across global market, the Bank of America had voiced a cautiously optimistic tone adding, “We are in the trickiest part of the investment cycle: tightening ending but easing far from beginning, inflation over but recession not yet begun, China reopen vs US recession…little wonder Wall St narratives (are) changing quicker than a TikTok video”.