Market Analysis

With China observing a weeklong holiday, traders have shifted their focus to futures markets in Singapore and Hong Kong.

Outstanding contracts on the SGX FTSE China A50 Index have reached a record 1.2 million, as the market has been closed since the Golden Week holiday began last Tuesday. Meanwhile, similar contracts in Hong Kong saw an 18% increase in open interest, although the total remains below 16,000 futures and far from its peak.

"The significant trading volumes reflect global investors managing their exposure to China and positioning themselves ahead of the cash market reopening," stated Ding Meiyan, head of equity-derivatives product management at SGX Group.

On September 30, the China A50 Index closed at its highest level since January 2023, following its best day in nearly 16 years after the government unveiled a series of measures to stimulate the economy. Since then, traders have turned to various instruments globally as proxies for China in anticipation of the market's reopening on Tuesday.

Although many global fund managers and strategists remain cautious about the rally, the Hang Seng China Enterprises Index in Hong Kong has risen by 11% this month, reaching its highest point since February 2022.

Paraphrasing text from "BNNBloomberg" all rights reserved by the original author.