Exchange-traded funds tracking Chinese A shares rallied in New York amid speculation policy makers will introduce more measures to boost growth in the world’s second-largest economy and stabilize mainland markets.

The Deutsche X-trackers Harvest CSI 300 China A-Shares ETF rose 3.7 percent to the highest since Aug. 21 on Monday. The Market Vectors ChinaAMC A-Share ETF increased 4.1 percent, also reaching a seven-week high. American depositary receipts of Alibaba Group Holding Ltd. advanced for a fourth day as Societe Generale SA analysts said they may be included in MSCI Inc.’s global investment benchmarks at a review next month.

The gains in the ETFs mirrored an advance in the Shanghai Composite Index, which rose 3.3 percent following speculation that the People’s Bank of China will reduce interest rates or reserve-requirement ratios as data this week will likely show slowing exports and decelerating inflation. The central bank has cut the amount of cash lenders must set aside as reserves three times this year and lowered rates five times since November, as the economy heads for its weakest annual expansion in more than two decades.

“It’s all about what the Chinese officials decide to do,” said Ankur Patel, chief investment officer at R-Squared Macro Management LLC. “As more and more anticipation builds for stimulus, I think you’ll see the Chinese markets stabilize on the back of that.”

David Fuller's view

It would have been shocking if China’s mainland share indices had not rallied sharply when the market reopened today, following last week’s gains in Hong Kong and most leading stock markets globally.  Shanghai A-Shares did not disappoint with a gain of 3.28%, while the Shenzhen Composite Index added 4.18%.

Upside follow through on Tuesday, which I expect, would provide further evidence of returning confidence against a background of government support for the economy.  Conversely, a weaker performance would suggest a need for some additional base formation development before a significant rally occurs.