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  • What a difference a long weekend can make.

  • Since China's New Year holiday marked the turning point for assets from oil to stocks,

  • what might the more global Easter break do to sentiment?

  • Investors can only hope.

  • Since mid-February and that China break, charts have mostly pointed upwards.

  • But the mood has been less one of conviction or even relief than the feeling that what went down will probably go up.

  • Strategists at Société Générale have termed itrisk-uncomfortably-on”.

  • Nowhere is that clearer than in international sentiment towards China.

  • Take the Hang Seng China Enterprises Index, Hong Kong listed Chinese stocks, in other words.

  • If you compare the 10 worst performers before February 11th with the 10 best performers since that point,

  • you'll find many of the same names on both lists.

  • That does suggest more short covering than any willingness to bet on specific companies or even sectors for outperformance.

  • The strength of bearish views on China, especially among western investors,

  • show why fear is still beating conviction.

  • But macro bets on a weaker Renminbi have been one of the most crowded and most painful trades of the first quarter.

  • Perhaps refreshed investors next week might be ready to think again.

  • Okay, strong bull calls involving China are very unlikely.

  • But there are tactical reasons to think that gains can be extended.

  • Not least the greater weighting to be given to Chinese ADRs,

  • the shares of US listed Chinese groups,

  • In MSCI indices, these are due at the end of May.

  • Now changes have already added the likes of Alibaba, Bido and Weibo to the MSCI universe.

  • This is followed by trillions of dollars.

  • But there are further ships due.

  • After those, China's weight in the benchmark emerging markets index will rise by another 2% points to about 26%, according to Goldman Sachs.

  • It's easier to be positive on China's Internet giants admittedly than other sectors,

  • and Alibaba, Bidu, and Weibo have gained between 29% and 54% since the mid-February trough.

  • Performances that would put all three in the top five of the HSCEI over that time.

  • Perhaps some investors really will use this holiday to come up with other China-related ideas.

  • The MSCI move and the change it forces on investors are just another reason why markets can't ignore China,

  • even if they wish they could.

What a difference a long weekend can make.

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