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Stock-market bets against Nasdaq index hit decade peak

Stock-market bets against Nasdaq index hit decade peak

The technology-laden Nasdaq Composite Index stands less than 2% from its early September peak, as of late Tuesday trade, reflecting its resurgence from its jaunt into correction territory less than a month ago.

However, rather than betting on continued progress in the popular benchmark that has led the run-up from coronavirus-induced lows, investors are mounting bets that the benchmark continues to be overpriced and faces a fresh collapse in the near-term.

“Somebody, somewhere, still wants to bet against this market,” writes Jason Goepfert, head of SentimenTrader and founder of independent investment research firm Sundial Capital Research, in a Tuesday research note.

Goepfert writes that so-called short interest, or the total number of shares of a particular stock or fund that have been sold short by investors, but haven’t yet been covered or closed out, on stocks trading on the Nasdaq Composite
COMP,
-0.10%

rose in the last two weeks of September to around the highest level in 10 years, at around 9.7 billion shares (see chart below expressed as a percentage below a chart of the Nasdaq Composite’s absolute value).


Jason Goepfert at SentimenTrader

Of note, Goepfert said some investors view rising short interest as a contrarian sign, one that may signal a bullish trend for the benchmark market, since it also reflects a potential snapback trade for stocks if bearish investors suddenly are forced to unwind their short bets and buyback stocks they have borrowed in their short bets.

However, the SentimenTrader analyst says investors willing to dismiss the current rise in short-term interest, or view it as a potential cause for buying and not caution, do so at their own peril.

As the stock market has surged higher in the aftermath of its swoon back in March, amid the peak of selling precipitated by worries about the economic

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China’s stock market reopens with a bang on economic data, Hang Seng Index subdued on virus concerns

China’s stock market reopens with a bang on economic data, Hang Seng Index subdued on virus concerns



calendar: A woman wearing a protective mask walks past an electronic board displaying stock indexes in markets around the region. Photo: Bloomberg


A woman wearing a protective mask walks past an electronic board displaying stock indexes in markets around the region. Photo: Bloomberg

China’s stock market reopened with a bang after an eight-day holiday as a private economic report signaled a sustained recovery in the nation’s services industry. Hong Kong stocks were rangebound amid concerns about new measures to contain local coronavirus cases.

The CSI300 index, which tracks the performances on Shanghai and Shenzhen bourses, gained as much as 1.9 per cent to 4,672.41 from the level on September 30. The gauge has risen by more than 14 per cent so far this year. The Hang Seng Index was little changed at 24,225.03, and was on course for a weekly gain.

The China Caixin/Markit services PMI index rose to 54.8 in September versus 54 in the preceding month, today’s report showed. The Composite PMI index, however, eased to 54.5 versus 55.1 previously. Readings above 50 indicate expansion.

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This was above the median expectation in a Bloomberg survey for a reading of 54.3, with the rate of expansion the sharpest for three months and among the quickest recorded over the past decade.

Zhejiang Sanhua Intelligent Controls, which manufactures appliance parts, led gains among CSI300 members with a 9.2 per cent rally.

Shares of Beijing Yanjing Brewery, one of China’s largest breweries and a subsidiary of municipal government-backed conglomerate Beijing Enterprises Holdings, fell as much as 5 per cent to 8.01 yuan. The company said its chairman had been detained by mainland Chinese authorities to assist an official investigation, in a filing to the Shenzhen exchange on Thursday night.

In Hong Kong, health officials warned of an alarming rebound in Covid-19 infections, saying the number of

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