Chinese ETFs Tumble After Latest Rally. 2 Potential Reasons.
The explosive rally in Chinese equities appears to have paused for now.
And rightfully so: Chinese equities have rallied hard since last week and it’s time to lock in profits at current levels, especially for investors who feel queasy about the country’s economic story. China is suffering through a property crisis on the back of excessive borrowing and to counteract the pain, the Asian nation has launched a series of measures to revive its economy, including interest-rate cuts.
Compounding this volatility, news of European countries considering substantial tariffs on Chinese electric cars adds another layer of uncertainty, especially with the U.S. elections on the horizon, which could trigger additional tariffs.