Chinese stocks just had their best day in 16 years, leading related US ETFs higher

Chinese stocks rose to their best day in 16 years and related US ETFs also rose after recent economic stimulus supported investor optimism in the market.

The Shanghai composite rose 8.06% in its best day since September 2008 and capped a nine-day winning streak for the index. It ended September up 17.39%, its first monthly gain in five and its best monthly performance since April 2015.

The Shenzhen Composite Index closed up 10.9%, its best day since April 1996. It gained 24.8% in September, its best month since April 2007.

The China ADR Index gained almost 6%.

US listed HR company shares Kanzhun grew 9% with the online video company Bilibili. Tencent Music Entertainment gained 2.9%, while the online brokerage Futu Holdings increased by 15%.

The KraneShares CSI China Internet ETF (KWEB) increased by 4.2%, while the iShares China Large-Cap ETF (FXI) increased by 2.2%.

US listed shares of Alibabathe second largest holding in the ETF, had gained more than 4%. Another top holding company, JD.comgained 5.4%.

Chinese stocks were on a tear after Beijing last week unveiled a raft of economic stimulus measures, including interest rate cuts, to shore up the weak housing market. On Thursday, state media said Chinese President Xi Jinping and other top leaders had confirmed the measures.

“While we don’t know for sure if they will be enough to really revive the economy, it’s certainly the right first step,” said Art Hogan, chief market strategist at B. Riley Securities. “I think the impact of China’s strengthening cannot be underestimated.”

“All in all, this will be an ambiguous positive for futures markets,” he added. “And I think a lot of investors are going to have to quickly recalibrate their expectations.”

Following this move, several US investors are bullish on the market. Last week, billionaire hedge fund founder David Tepper said he was overwhelmingly bullish on Chinese stocks as he bought “everything” related to China following the Federal Reserve’s recent interest rate cut.

— CNBC’s Gina Francolla, Nick Wells, Lim Hui Jie and Evelyn Cheng contributed to this report.