China Stock Traders Are Clinging to Every Sign of Hope They See

Just weeks back, Chinese stock traders were looking at every excuse to sell. In a dramatic shift in sentiment, they are now latching onto the slightest signal of positive news.

Unverified social posts about a China reopening and a whiff of progress in Sino-American audit talks sent the market into overdrive last week. Then on Wednesday, Beijing’s expansion of a financing support program spurred frenzied buying of property stocks even as authorities didn’t say how much aid is meant for developers.

Investors are citing reasons from dirt-cheap valuations to the sheer fatigue after a relentless rout that’s gone on ...