Despite the closure of mainland Chinese markets for a holiday, China stock ETFs experienced a surge in value.

Overseas exchange-traded funds that track Chinese stocks experienced a stimulus-induced rally on Wednesday, despite the mainland markets being closed for a week-long holiday.

In the U.S., several well-known China ETFs, including (KWEB), (FXI), (MCHI), and (PGJ), experienced a rise of at least 5% in morning trading. KWEB and PGJ have been increasing for five consecutive days.

The majority of these funds invest in Chinese equities listed on the Hong Kong Stock Exchange or U.S. companies headquartered or incorporated in China. The mainland Chinese markets, including the Shanghai and Shenzhen stock exchanges, will remain closed until October 8.

"Scott Rubner, a tactical specialist at Goldman Sachs, stated in a note that he is optimistic about Chinese equities and believes this time is different. He explained that he has never witnessed such high daily demand for Chinese equities, and he believes they have not yet returned to their benchmark index weights."

Beijing introduced a series of stimulus measures last week to reverse the decline of Chinese equities, which included cutting interest rates and reducing the amount of cash banks were required to hold.

The government's promise of strong stimulus has revived optimism in Chinese stocks, which had been struggling due to a slow economy and regulatory crackdowns in recent years. According to David Tepper, founder of hedge fund Appaloosa Management, he is buying "everything" related to China because of the government's support.

On Wednesday, JD.com experienced a 5% increase, marking its fifth consecutive day of growth. Meanwhile, PDD also saw a 4.8% surge after a 8% rise the previous day.