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China ETFs Look Optimistic Ahead of Trade Talks

This article was originally published on ETFTrends.com.

China country-specific exchange traded funds, led by technology focused strategies, were among the best performers Monday ahead of trade talks between the U.S. and China.

On Monday, the technology-heavy PowerShares Golden Dragon China Portfolio (PGJ) rose 2.7% and KraneShares CSI China Internet Fund (KWEB) gained 2.2%.

Traders were largely optimistic as a delegation led by China’s vice commerce minister, Wang Shouwen, is expected to conduct two days of trade talks in Washington beginning Wednesday, marking the first formal negotiations since Washington imposed tariffs on $50bn of Chinese imports, the Financial Times reports.

China's banking regulators over the weekend also urged banks to provide support on infrastructure projects and for exporters in a bid to bolster the economy.

Additionally, according to Linus Yip, a strategist with First Shanghai Securities Ltd., officials met with analysts to seek their views on markets, potentially providing a boost, Bloomberg reports.

“The securities regulator is said to have held a closed-door meeting with analysts, that may have fueled expectations there’ll be some moves to stabilize the market,” Yip told Bloomberg.

Chinese equities have plunged into a bear market since the January highs due to a variety of factors, including Beijing’s deleveraging campaign and its impact on liquidity, a trade dispute with the U.S., a depreciating yuan currency and signs of a slowing economy.

Year-to-date, the iShares China Large-Cap ETF (FXI) declined 8.9% and Xtrackers CSI 300 China A-Shares ETF (NYSEArca: ASHR ) , which tracks mainland Chinese A-shares, plunged 21.2%.

“Authorities certainly don’t want to see stocks slide further, valuations at current levels appear attractive, though it would be hard to revive sentiment on the market,” Shen Zhengyang, a strategist with Northeast Securities Co., told Bloomberg. “The trade negotiations that are dragging on will continue to cloud the market outlook.”

For more information on the Chinese markets, visit our China category.

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