Global investors are returning to China’s stock markets after a widespread sell-off earlier this year triggered by draconian Covid-19 restrictions, the geopolitical implications of Russia’s war in Ukraine and the lingering effects of regulatory crackdowns.

The country’s CSI 300 stocks index started 2022 with the worst quarterly drop since the popping of a debt-fuelled bubble seven years ago in Shanghai. It kept falling from there to leave it down 17 per cent this year, outstripping declines on other major national stocks benchmarks. Global investors have pulled out billions of dollars a month.

But now some international money managers are betting that the worst is over. Offshore investors using Hong Kong’s Stock Connect trading scheme have bought a net Rmb28bn ($4.2bn) of mainland Chinese equities over the past week. That still leaves total holdings down from their January peak, but also comes as the CSI 300 has gained almost 9 per cent since the low point in April.