FTSE China A50 index opens up 0.23%.

FTSE China A50 index opens up 0.23%.

The FTSE China A50 index opened up by 0.23% on June 5, 2025, despite ongoing trade tensions and recent tariff reinstatements. Analysts from Capital Economics remain cautiously optimistic about China's stock market performance, citing historical data and domestic policies as key factors.

Thomas Matthews, Head of Markets, Asia Pacific at Capital Economics, notes that while the U.S. Court of International Trade's recent decision and the temporary reinstatement of certain tariffs have introduced uncertainty, the market's volatility is not unprecedented. Since the U.S. election, the MSCI China Index has outperformed the MSCI USA index and the MSCI World Ex USA index, demonstrating resilience [1].

Domestic policy measures have also played a significant role in bolstering the market. A major support package announced last September and the renewed focus on private sector participation in artificial intelligence earlier this year have provided a lift to Chinese equities. Furthermore, investor sentiment and valuations remain favorable, with Chinese equities trading at a discount relative to global peers [1].

While the overall economic outlook is clouded by waning fiscal stimulus and limited room for monetary easing, the technology sector presents a bright spot. Tech companies have delivered solid earnings growth and benefit from a more constructive policy stance following a period of government crackdowns. Matthews expects continued support from authorities, which could further boost Chinese tech stocks and the broader market [1].

The FTSE China A50 index's performance reflects a balanced outlook, acknowledging both challenges and opportunities. As trade tensions persist, investors will continue to monitor the impact of domestic policies and sector-specific trends on the Chinese stock market.

References:
[1] https://www.investing.com/news/stock-market-news/chinas-stock-market-could-thrive-despite-tariffs-analyst-4072751