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China, Hong Kong and Japan have all started the year strongly, outperforming their Western peers
Thursday 28 Jan 2021 Author: Mark Gardner

Asian stock markets have enjoyed a soaring start to 2021, having significantly outperformed major Western indices like the FTSE 100 and S&P 500.

The best performing major stock market in the world so far this year has been the Hang Seng in Hong Kong with a 10.8% return year-to-date according to SharePad, followed by the tech-heavy Nasdaq in the US with a 6.4% return and Japan’s Nikkei 225 which has returned 5%.

Saxo Bank market strategist Eleanor Creagh says Asian outperformance has been driven by optimism regarding vaccine rollout and economic recovery, and it has been the region global investors have focused on since the back end of 2020.

She adds that Asia is also ‘benefiting from better virus handling, the engine of China’s reflationary regime with broad scale infrastructure and construction stimulus, and continued dollar weakness, supporting flows into emerging markets.’

While the broad Shanghai Composite index in China is up 3.9%, Chinese large cap stocks are significantly outperforming with the FTSE China 50 Index up 13.8% year to date while the CSI 300 Index, which takes the top 300 stocks in the Shanghai Composite, has gained 6.7%.

In comparison, the FTSE 100 and S&P 500 have both returned around 2.6%, while European stocks have fared worse with France’s CAC 40 and Germany’s DAX both in negative territory.

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