HEDGE FLOW Hedge Funds Cut China Stocks for Fourth Week as DeepSeek Optimism Fades
Global hedge funds have reversed course, selling China equities for a fourth straight week as renewed enthusiasm for Chinese tech stocks ignited by low-cost artificial intelligence startup DeepSeek began to fade. The sell-off is attributed to decelerating trade growth and worsening deflationary pressures reflected in latest data. Hedge funds' net allocation to Chinese equities remains relatively light, ranking in the 37th percentile over the past five years.
- This sell-off highlights the vulnerability of emerging markets to changing investor sentiment, underscoring the need for investors to stay nimble in response to shifting economic landscapes.
- Will hedge funds eventually regain their bullish stance on China, or will ongoing concerns about deflation and trade growth forever alter their views on the country's stock market?