China was ready for an oil shock and now investors are reaping the rewards

China's preparedness for an energy shock has helped its financial markets post a top-performing month globally, prompting global investors to consider increasing exposure amid the continuing Iran war. The combination of energy resilience and relative market outperformance is driving flows into Chinese equities and broader EM allocations, while geopolitical risk keeps upside volatility and commodity price sensitivity elevated.

Analysis

China's preparedness for an energy shock has helped its financial markets post a top-performing month globally, prompting global investors to consider increasing exposure amid the continuing Iran war. The combination of energy resilience and relative market outperformance is driving flows into Chinese equities and broader EM allocations, while geopolitical risk keeps upside volatility and commodity price sensitivity elevated.