Chinese Stocks Lag U.S. at Record Levels Despite Friday Rebound

Chinese stocks’ gap with U.S. equities reached record levels during the week ended October 23, according to calculations published by 24/7 Wall St. A Friday rebound narrowed the divide but did not erase the broader underperformance, while separate reporting indicated state-backed buying had helped stabilize mainland markets.

The publication calculated that the S&P 500’s ratio to the Shanghai Composite reached its highest level since its dataset began in 1997. Its comparison with Hong Kong’s Hang Seng also reached a record in data stretching back to 1990. Those findings describe records within the periods examined, rather than an unrestricted claim covering all market history.

The distinction between index levels and investment returns matters. Comparing benchmarks quoted in local currencies is not equivalent to measuring what an investor earned after currency movements and dividends. The publication also examined dollar-denominated exchange-traded funds with dividends included, finding a record divergence in that separate comparison.

The immediate backdrop was a selloff that pushed China’s CSI 300 into bear-market territory Thursday. City News Service reported that the benchmark, which tracks leading Shanghai and Shenzhen shares, fell 1.8% that day and stood about 20% below its June peak. The decline placed renewed attention on whether support could halt selling rather than merely interrupt it.

Friday brought relief, complicating the supplied account’s suggestion that state-backed funds remained inactive. City News Service reported that buying by those funds helped mainland shares recover from morning losses. Shanghai finished 0.9% higher and Shenzhen gained 2.8%, although both benchmarks still recorded weekly declines.

The recovery was also uneven beneath the headline indexes. According to City News Service, semiconductor, battery, robotics and consumer-electronics shares helped lead the afternoon advance, while several major banks declined. That split suggests the session was not a uniform restoration of confidence across Chinese equities, even as some growth-oriented sectors attracted buyers.

Investors’ concerns extend beyond the availability of market support. City News Service linked the recent weakness to slowing or lower corporate profits, a broader technology-stock retreat and rising oil prices. These pressures can affect expectations for earnings and financing conditions, making a sustained recovery a different challenge from producing a single positive session.

For international investors, the widening performance divide raises questions about portfolio exposure, but relative weakness alone does not establish that a market is undervalued. Index composition, earnings prospects and currency effects also influence comparisons. Equally, a rebound associated with state-backed purchases does not by itself demonstrate that private demand has recovered.

The next trading sessions will test whether Friday’s buying broadens and persists. The reporting points to corporate earnings, technology-sector sentiment and the durability of support as important considerations. Until gains extend beyond a short-lived rebound, the record relative gap remains evidence of past divergence—not a reliable forecast of which market moves next.