This incredible statistic shows just how broad the China rally was

By Steve Goldstein

Shanghai Composite Index surges 8% Monday to stretch September's gain to 17%

Investors often look to advancers versus decliners information as a way to determine market breadth.

According to KraneShares, in mainland China there were 5,088 stocks that advanced on Monday, while only four declined.

The Shanghai Composite Index CN:SHCOMP surged 8% to stretch September's gain to 17%.

The rally, the best in 16 years, came ahead of a market holiday and amid talk that the Chinese government will announce additional stimulus measures. There also was the removal of housing restrictions in Beijing, Shanghai and Shenzhen.

What was also remarkable was that mainland investors were scrambling to buy Hong Kong stocks, and vice versa.

KraneShares said Northbound Stock Connect - which allows Hong Kong and overseas investors access to A-class shares in the mainland - saw four times its normal activity, while Southbound Stock Connect, which lets Chinese investors access Hong Kong listings, saw six times its normal volumes.

Scott Rubner, a strategist at Goldman Sachs, said he received the largest-ever number of questions on China this weekend. "Investors are doing work right now," he said.

"This is new, and S&P is not the horse to ride this October," he said, a reference to the S&P 500 SPX. He recommended call spreads on the iShares China Large-Cap exchange-traded fund FXI and calls on the iShares MSCI Emerging Markets ETF EEM.

-Steve Goldstein

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

09-30-24 1038ET

Copyright (c) 2024 Dow Jones & Company, Inc.