News

Leveraged Bets on China Stocks Surge as Risk Appetite Grows

(Bloomberg) -- Leveraged equity positions in China surged at the fastest pace in more than a decade as traders boosted risky wagers upon their return from the Golden Week holiday.

The outstanding amount of margin debt in Shanghai and Shenzhen exchanges rose to 1.54 trillion yuan ($218 billion) on Tuesday, up 7.4% from the last trading session on Sept. 30, according to data compiled by Bloomberg. That’s the fastest pace since at least 2013, when data shows an abnormal spike.

Chinese stocks have seen frenzied trading since Bejing rolled out a barrage of stimulus in late September, with onshore turnover hitting a record on Tuesday as investors sought to catch up on a week of missed trading opportunity. Yet caution is seeping back in as benchmarks reach overbought levels. The CSI 300 Index fell more than 6% on Wednesday, on track to cap a 10 session run of gains.

Retail investors are hungry for more gains. A gauge tracking transfers from savings accounts into stock accounts by the Industrial & Commercial Bank of China more than tripled on Tuesday from Sept. 30 levels, media reports show.