(Bloomberg) — China’s markets reopen on Thursday after the Golden Week break with investors weighing whether renewed enthusiasm for artificial intelligence can outweigh signs of soft consumer spending.
Holiday data showed households remained cautious. Spending was restrained, with cheaper road trips replacing flights and box office sales missing expectations. The weakness in consumption comes alongside an artificial intelligence frenzy that sent global tech stocks to fresh highs while China was shut, fueled by firms touting OpenAI ties.
Most Read from Bloomberg
Overall, a gauge tracking large mainland stocks listed in Hong Kong has declined 0.3% over the period when Chinese markets were closed. The offshore yuan edged lower during the break. Traders are watching for policy signals ahead of the Communist Party’s Oct. 20-23 meeting, where the blueprint for the 15th five-year plan will be outlined. The Trump-Xi meeting at next month’s APEC summit in South Korea could add another catalyst if tariff talks resume.
“Early macro data I’m seeing for tourism during the holiday wasn’t great,” said Xin-Yao Ng, a fund manager at Aberdeen Investments. “I suspect at best flattish to slightly down if there isn’t new and better data coming out later,” he added, referring to the mainland stock market open.
The CSI 300 Index has climbed for five straight months through September, its longest winning streak since 2017, led by enthusiasm over chip stocks after DeepSeek’s unveiling of an updated AI model and Huawei Technologies Co.’s plan to double output of its top AI chips. The gauge is up 18% this year.
Despite the rally, Chinese equities remain much cheaper than their peers. The MSCI China Index traded at below 14 times forward earnings — far below the S&P 500’s valuation at 23 times, according to Bloomberg-compiled data.
“If high-growth Chinese names, particularly in the internet space, can deliver on their potential earnings, they’re looking very attractive relative to global peers,” said Ian Samson, a multi-asset portfolio manager at Fidelity International in Singapore.
Weak Spending
Golden Week spending reflected consumers’ budget-conscious behavior. Travel and experiences remain a priority, but box office figures and airline demand disappointed.
Movie stocks, including Maoyan Entertainment and Damai Entertainment Holdings Ltd., fell Wednesday in Hong Kong after Citigroup flagged weak ticket sales. Morgan Stanley noted a shift from air and rail to highway travel, with private car passenger volume up 6% year-on-year during the Golden Week.
Average passenger traffic for all travelers was up almost 7% year-on-year in the first seven days, according to a Bloomberg tally of the Ministry of Transport’s data. That’s a decline from the 8% surge during the five-day Labor Day holiday in May.
Golden Week data points to persistent consumption weakness in China, which may prompt profit-taking in consumer-related stocks, according to Julius Baer analysts.
Post-Holiday Package
Late last month, China introduced a 500 billion yuan ($70 billion) capital injection to spur investment, part of a long-anticipated “new financing policy tool.”
Markets expect a “favorable post-holiday policy package,” reflected in gains among brokerages, a sentiment-sensitive sector, said Daniel Tan, a portfolio manager at Grasshopper Asset Management.
“We anticipate a stronger focus on reflating domestic demand, with anti-involution measures likely to be in the spotlight,” said Xingchen Yu, emerging markets strategist at UBS Global Wealth Management. Effective policies to tackle deflation could help unlock excess savings and boost consumption, he added.
Yuan Strength
The offshore yuan dipped 0.3% against the dollar during the holiday but remains up more than 2% this year amid growing appetite for Chinese assets.
Traders are watching the People’s Bank of China’s daily reference rate for policy signals as onshore markets reopen. The central bank’s fixing, expected to resume Thursday, is likely to convey stability and provide an anchor to regional currencies, said Fiona Lim, senior foreign-exchange analyst at Malayan Banking Berhad.
“Much of the onshore yuan performance will depend” on the fixing, she said, expecting resilient exports and demand-side stimulus to propel the yuan to strengthen to around 7.07 per dollar by year-end.
–With assistance from Cecile Vannucci and Chongjing Li.
Most Read from Bloomberg Businessweek
©2025 Bloomberg L.P.
(Bloomberg) — China’s markets reopen on Thursday after the Golden Week break with investors weighing whether renewed enthusiasm for artificial intelligence can outweigh signs of soft consumer spending.
Holiday data showed households remained cautious. Spending was restrained, with cheaper road trips replacing flights and box office sales missing expectations. The weakness in consumption comes alongside an artificial intelligence frenzy that sent global tech stocks to fresh highs while China was shut, fueled by firms touting OpenAI ties.
Most Read from Bloomberg
Overall, a gauge tracking large mainland stocks listed in Hong Kong has declined 0.3% over the period when Chinese markets were closed. The offshore yuan edged lower during the break. Traders are watching for policy signals ahead of the Communist Party’s Oct. 20-23 meeting, where the blueprint for the 15th five-year plan will be outlined. The Trump-Xi meeting at next month’s APEC summit in South Korea could add another catalyst if tariff talks resume.
“Early macro data I’m seeing for tourism during the holiday wasn’t great,” said Xin-Yao Ng, a fund manager at Aberdeen Investments. “I suspect at best flattish to slightly down if there isn’t new and better data coming out later,” he added, referring to the mainland stock market open.
The CSI 300 Index has climbed for five straight months through September, its longest winning streak since 2017, led by enthusiasm over chip stocks after DeepSeek’s unveiling of an updated AI model and Huawei Technologies Co.’s plan to double output of its top AI chips. The gauge is up 18% this year.
Despite the rally, Chinese equities remain much cheaper than their peers. The MSCI China Index traded at below 14 times forward earnings — far below the S&P 500’s valuation at 23 times, according to Bloomberg-compiled data.
“If high-growth Chinese names, particularly in the internet space, can deliver on their potential earnings, they’re looking very attractive relative to global peers,” said Ian Samson, a multi-asset portfolio manager at Fidelity International in Singapore.
Weak Spending
Golden Week spending reflected consumers’ budget-conscious behavior. Travel and experiences remain a priority, but box office figures and airline demand disappointed.
Movie stocks, including Maoyan Entertainment and Damai Entertainment Holdings Ltd., fell Wednesday in Hong Kong after Citigroup flagged weak ticket sales. Morgan Stanley noted a shift from air and rail to highway travel, with private car passenger volume up 6% year-on-year during the Golden Week.
Average passenger traffic for all travelers was up almost 7% year-on-year in the first seven days, according to a Bloomberg tally of the Ministry of Transport’s data. That’s a decline from the 8% surge during the five-day Labor Day holiday in May.
Golden Week data points to persistent consumption weakness in China, which may prompt profit-taking in consumer-related stocks, according to Julius Baer analysts.
Post-Holiday Package
Late last month, China introduced a 500 billion yuan ($70 billion) capital injection to spur investment, part of a long-anticipated “new financing policy tool.”
Markets expect a “favorable post-holiday policy package,” reflected in gains among brokerages, a sentiment-sensitive sector, said Daniel Tan, a portfolio manager at Grasshopper Asset Management.
“We anticipate a stronger focus on reflating domestic demand, with anti-involution measures likely to be in the spotlight,” said Xingchen Yu, emerging markets strategist at UBS Global Wealth Management. Effective policies to tackle deflation could help unlock excess savings and boost consumption, he added.
Yuan Strength
The offshore yuan dipped 0.3% against the dollar during the holiday but remains up more than 2% this year amid growing appetite for Chinese assets.
Traders are watching the People’s Bank of China’s daily reference rate for policy signals as onshore markets reopen. The central bank’s fixing, expected to resume Thursday, is likely to convey stability and provide an anchor to regional currencies, said Fiona Lim, senior foreign-exchange analyst at Malayan Banking Berhad.
“Much of the onshore yuan performance will depend” on the fixing, she said, expecting resilient exports and demand-side stimulus to propel the yuan to strengthen to around 7.07 per dollar by year-end.
–With assistance from Cecile Vannucci and Chongjing Li.
Most Read from Bloomberg Businessweek
©2025 Bloomberg L.P.
