Mounting concerns over global growth led to heavy declines in stock indices around the world over the past month, but the Shanghai Composite bucked the trend.
Faltering global growth lies at the heart of the market rout, with recent data from Europe exacerbating concerns.
Last week, the International Monetary Fund downgraded its global growth forecast for the third time this year. Meanwhile, continued tensions between Russia and the Ukraine, and concerns about an Ebola outbreak dampened risk appetite. On Wednesday, the VIX - a market gauge of volatility - spiked 25% to an intra-day high of 28.53 the highest level since December 2011.
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"Right now it's all about the pre-Fourth Plenum optimism," said Stephen Sheung, vice president and investment strategist at SHK Private, "that's what's supporting the Shanghai market,"
The China Communist Party's fourth party plenum is set to take place on October 20-23 and authorities have indicated that measures will be taken to improve the legal system and the mechanism for overseeing it. Markets interpret progress on reforms as a step towards China's transition to a 'modern economy.'
Sheung also highlighted attractive valuations in Shanghai and Hong Kong as a key driver for money flows into the region. The Shanghai Composite is currently trading at a price-to-earnings ratio of 10.13 times, compared with 18 times for the S&P 500.