Surge in Foreign Buying Drove China Stocks’ Best Day in Months

(Bloomberg) -- Global funds snapped up $2.7 billion worth of Chinese stocks on Wednesday, a sudden comeback that helped drive the best rally in more than five months.

The inflow was the biggest since a record 22.4 billion yuan ($3.1 billion) in April, and helped trim July’s outflow to around 17 billion yuan. Foreign funds had turned net sellers in recent months as a flurry of negative headlines on geopolitical tensions to slowing economy soured sentiment.

Turnover for onshore equities also jumped more than 50% on Wednesday from the previous session, suggesting the pickup in inflows helped rejuvenate trading activity. With Beijing set to stop the release of daily overseas flows starting mid-August, the market may lose a key sentiment indicator.