China Stocks Primed for Bullish Reopen After Upbeat Data

(Bloomberg) — Chinese stocks look poised for a strong open when onshore traders return from the Lunar New Year break, with buoyant travel and tourism data seen bringing a much-needed relief to one of the world’s worst-performing major markets.

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With trading in mainland China shut Feb. 9-16, investors will likely take cues from gains seen for the country’s shares listed offshore. A gauge of stocks in Hong Kong rallied nearly 5% since it reopened on Wednesday while the Nasdaq Golden Dragon China Index jumped 4.3% for the week, underscoring room for onshore shares to play catch-up.

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Spending patterns during one of China’s most important holidays suggest consumption has revved up even as the broader economy struggles with deflation and a property crisis. Market watchers expect the stream of positive data to give equities at least a short-term boost, lending a helping hand to authorities’ efforts to revive investor confidence. A big question, however, remains on the sustainability of any rebound in the face of deeper economic woes.

“The early read from Chinese New Year data, from holiday hotel sales to Macau visit numbers, points to bright spots in services-related industries,” said Linda Lam, head of equity advisory for North Asia at Union Bancaire Privee. “A-shares should open on a stronger note, continuing the share price recovery on the back of state support,” she said, referring to Chinese stocks traded on the mainland.

A swath of Chinese stocks in Hong Kong surged in response to holiday data showing a 61% gain in rail trips from a year earlier, when the country was experiencing a widespread Covid outbreak. Online hotel bookings and spending on delivery giant Meituan also saw hefty gains.

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Macau reported more than 1 million visitors in the first six days of the holiday — the highest since 2017 when daily data for peak seasons became…