Chart of the Day: Stock Trading Spikes to 11-Month High

Chinese stock investors are trading more as the country’s markets show signs of rebounding after months of poor performance. The combined daily trading volume on the Shanghai Stock Exchange and the Shenzhen Stock Exchange hit an 11-month high on Tuesday, according to official data.

Confidence in the country’s bumpy stock markets seems to be recovering, as investors traded over 607.1 billion yuan ($89.7 billion) worth of shares on the two bourses Tuesday, the largest daily trading volume since March 23.

Chinese investors have had a miserable past year as the markets sank amid the country’s slower economic growth and rising trade tensions with the U.S. In October, the benchmark Shanghai Composite Index, the primary indicator of China’s stock market, dropped to a four-year low.

The latest uptick in total social financing — a broad measure of credit and liquidity in the Chinese economy — and the easing China-U.S. trade tensions have paved the way for a rebound in the stock market, said Zhang Yulong, an analyst with China Securities Co. in a research note.

The gradual improvement in market sentiment is the key driver of the improvement, said Ming Ming, an analyst at Citic Securities in a note (link in Chinese). One key factor that will affect market sentiment in the short term is ongoing Sino-U.S. trade negotiations, Ming said.

Contact reporter Charlotte Yang (yutingyang@caixin.com)