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The Wall Street Journal

Don’t Chase China’s FOMO Rally

Chinese stocks go from ice-cold to red-hot in a matter of weeks, but it might be driven by momentum rather than stimulus

China’s market has been beset by an implosion of the housing market and a regulatory crackdown on its leading technology firms.
China’s market has been beset by an implosion of the housing market and a regulatory crackdown on its leading technology firms. Photo: LONG WEI/Zuma Press

It’s rare to see a major country’s stock market go from the doghouse to the penthouse in a matter of weeks.

Now that China has suddenly become the best-performing market in the world, investors need to recognize how much the gains are being driven by Beijing’s bolder steps to revive the nation’s sluggish economy and how much is just fear of missing out. They should proceed with caution.

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