Samir Arora, founder and CEO of Helios Capital, sees the rebound in Indian equities alongside the sharp slump in Hong Kong stocks as a sign of the end of the 'sell India to buy China' trade. In a recent interaction with Moneycontrol, Arora called this India-to-China shift a short-lived tactical move that wouldn't gain much traction beyond marginal trades.
In a post on social media platform X, formerly Twitter, Arora said that even though buying Chinese stocks is okay, no one needs to sell Indian equities to buy the former. "There are 50 other places from where fund managers can pull out to buy China if they so desire," Arora wrote in the post.
Arora's remarks come after Hong Kong's benchmark Hang Seng index dived 11 percent with the Hang Seng Mainland Properties index tanking more than 10 percent. Investors were left soured after China's state planner—National Development and Reform Commission (NHRC)—failed to deliver more stimulus towards the economic revival. The state planner also did not disclose any details of how the country plans to roll out its support measures. That disappointed investors, especially those who were hoping for more specifics on fiscal measures to stimulate the ailing Chinese economy.
"Markets were hoping to obtain some guidance on the size of fiscal stimulus at this presser – but with MoF (Ministry of Finance) not in attendance, it was unlikely this information was going to be provided," said Rong Ren Goh, a portfolio manager at Eastspring Investments.
"What's next? No major press briefing lined up so far. Thus, it is likely we see markets consolidating and digesting what has already been announced, which arguably is meaningful, but not quite enough to satiate lofty expectations."
While Hong Kong stocks reeled under sharp selling, Mainland China’s markets roared back from an extended break. The CSI300 blue-chip index surged 10 percent in early trading, reaching its highest level since July 2022, while the Shanghai Composite index similarly jumped to its strongest level since December 2021.
However, Mainland China stocks also came sharply off the highs following the NHRC's press briefing today. The CSI300 index was last up 4.3 percent, while the Shanghai Composite Index retreated slightly to last trade 3.34 percent higher. On the other hand, the Hang Seng index was last down 10.5 percent.
Samir Arora also remarked that this contrasting trend between Mainland China and Hong Kong stocks was because China was closed for a week and hence was catching up while the latter market was realising that it went up too much in the interim.
(With inputs from Reuters)
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