The Direxion Daily FTSE China Bull 3X Shares (YINN), a leveraged exchange-traded fund providing amplified exposure to Chinese equities, plummeted around 37% in pre-market trading on Monday, October 8th, 2024. The steep sell-off came as a euphoric rally in Chinese stocks over the past month cooled amid disappointment over the lack of significant new stimulus measures announced by Beijing.
Over the prior weeks, Chinese equities had surged nearly 30% as investors cheered a slew of stimulus policies unveiled by authorities, including interest rate cuts, easing bank capital requirements, and funds for corporate stock buybacks. This fueled optimism that the measures would revive the nation's slowing economy and propel a sustained rebound in the stock market.
However, the rally fizzled on Monday after officials from China's top economic planner, the National Development and Reform Commission (NDRC), held a much-anticipated press briefing but fell short of unveiling any major fresh stimulus policies. While the NDRC reiterated plans to boost investment and support for low-income groups, the lack of bold new measures dashed investor hopes for a continued rally, triggering heavy profit-taking in the leveraged YINN fund and other China-exposed assets.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.