Chinese assets strengthen during the National Day holiday: the market logic and implications behind A-shares “not wanting the holiday”

Keywords: Chinese assets, Nasdaq Golden Dragon China Index, Hang Seng Index, Hong Kong stocks, A-shares, liquidity, risk appetite, money-making effect

During the National Day holiday, Chinese assets kept strengthening overseas, and “A-shares not wanting the holiday for the first time” even trended on social media. Although the A-share market was closed, investors did not leave the field; instead, they turned more attention to overseas markets, especially Chinese concept stocks in the U.S. and the performance of Hong Kong stocks. According to market performance, the Nasdaq Golden Dragon China Index rose 11.85% for the week and posted its fourth straight weekly gain; after a brief pullback, Hong Kong stocks quickly resumed their uptrend. On October 4, Hong Kong’s Hang Seng Index closed up 2.82% at 22,736.87, the highest in two and a half years; the Hang Seng Tech Index rose 4.99% to 5,227.13. Chinese assets once again became a favorite of global capital, with the money-making effect spreading clearly.

1. Why did Chinese assets keep heating up during the holiday?

On the surface, this rally looks like a holiday-driven, short-term move. But at a deeper level, it reflects the marginal improvement in global investors’ expectations for Chinese assets. For quite a long time, Chinese assets traded at relatively low valuations, with high risk premiums and cautious sentiment. As policy expectations, liquidity conditions, and signs of earnings recovery gradually emerged, some capital began to reassess the allocation value of the Chinese market.

Especially amid rising overseas market volatility and repeated swings in U.S. economic data and rate expectations, the low-valuation advantage of Chinese assets became more pronounced. For global institutional investors, when U.S. asset volatility rises, seeking valuation gaps and clearer recovery opportunities becomes a key allocation direction. Hong Kong stocks and Chinese concept stocks were among the first to rebound precisely because they are more sensitive to external capital and can reflect changes in global risk appetite earlier.

2. Hong Kong stocks led the gains, with tech stocks as the main driver

In this rally, Hong Kong tech shares stood out. The Hang Seng Tech Index gained nearly 5% in a single day, showing that market confidence in internet, platform economy, artificial intelligence, and semiconductors is recovering. Tech stocks are highly elastic assets and have long been the preferred choice when risk appetite improves. Once capital flows back, their rebounds are usually the strongest.

Structurally, Hong Kong’s rise was not just sentiment-driven, but reflected three layers of logic: first, expectations for earnings recovery at leading tech firms improved; second, valuations had compressed deeply and now had obvious room to recover; third, policy signals continued to emphasize market stability and support for innovation, lifting medium- to long-term allocation willingness. For investors, this means the market is no longer just a “sentiment rebound,” but is beginning to show more sustainable structural opportunities.

3. With A-shares closed, overseas Chinese assets showed a clear “substitute effect”

During the A-share holiday closure, overseas Chinese assets became an important window into sentiment toward the Chinese market. The Nasdaq Golden Dragon China Index rose for four consecutive weeks, showing that capital did not leave the China theme just because A-shares were closed; instead, it used Chinese concept stocks and Hong Kong stocks to position ahead. This “substitute effect” is common in major rallies: when A-shares cannot trade, overseas Chinese assets often become the preferred channel for capital to express a view.

From a trading standpoint, this also explains why “not wanting the holiday” resonated so widely. For holders, the holiday meant they could not participate in the rally in time; for observers, continued strength meant the opportunity cost of missing out was rising. Once a money-making effect forms, it reinforces expectations and attracts more incremental capital.

4. Is this rally a sentiment rebound or the start of a trend?

To judge the nature of the rally, the key is not the one-day gain, but whether a sustained resonance between fundamentals and capital flows can form. So far, this rally in Chinese assets has some trend characteristics, but it still needs further confirmation from trading volume, earnings expectations, and policy delivery.

On one hand, valuation recovery has begun, but whether it can extend into an earnings-driven move depends on economic data and company results. On the other hand, the overseas liquidity backdrop still has uncertainty: the Fed’s policy path, the dollar index, and global risk-asset sentiment could all influence capital flows. Therefore, investors should recognize the recovery opportunity in Chinese assets while staying rational about market volatility.

That said, from a longer-term perspective, the appeal of Chinese assets is gradually recovering. Whether it is leading Hong Kong internet names or A-share areas such as advanced manufacturing, consumer recovery, financial technology, and dividend assets, they may attract capital rotation at different stages. Market style changes rarely move in a straight line; they are repeatedly differentiated and reshaped as expectations improve.

5. What this means for investors

This rally offers at least three lessons for market participants. First, low valuation does not mean no opportunity. When expectation improvement and capital inflows happen together, the elasticity of valuation recovery can expand quickly. Second, Hong Kong stocks and Chinese concept stocks remain important outposts for reading sentiment toward Chinese assets, especially when A-shares are closed and overseas markets lead. Third, structural opportunities are better than blindly chasing highs; investors should focus on directions with clear fundamental improvement, verifiable earnings expectations, and rising industry momentum.

For ordinary investors, holiday market performance is not just a “sentiment feast,” but also a chance to rethink the pricing logic of Chinese assets. In the past, the market worried more about external shocks and the pace of internal recovery. Now, capital is already expressing its judgment through action: in the process of global asset rebalancing, Chinese assets still have undeniable allocation value.

Conclusion

The strong performance of Chinese assets during the National Day holiday was no accident, but the result of valuation, sentiment, capital, and policy expectations working together. The Nasdaq Golden Dragon China Index’s continued rise, the Hang Seng Index reaching a phase high, and the Hang Seng Tech Index surging all show that global markets are reexamining the pricing room for Chinese assets. In the short term, the market may still be volatile; but over the medium to long term, the return of the money-making effect often signals the opening of a new allocation window. For investors hoping for a rebound in the Chinese market, this holiday indeed made it hard to “relax and truly take a break.”