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Market review: August 10, 2016

Fang submitted 2016-08-10 17:16:41

Market review:

China stocks declined after rally of 2 days with SHA declined about 0.23%.Most investors getting more conservative before several macro data release on Thursday and Friday, including new loans and industrial production growth in July.


Research Notes:

Money flowed into Coal Mining, Aviation and Construction Material sectors the most. Xi’An Shaangu Power Co.(601369.sh), a turbo-machinery manufacturer, rallied to limit-up as investors believed it will benefit from the fast expanding nuclear power industry in China.

DXY weakened overnight and boosted some rebound of CNYUSD, but with dim expectation for China macro data of July, we didn’t expect the firmness of CNYUSD could continue. In commodity market, coal, rapeseed meal and tin futures led the rally as investors continued to bet on more production cut of industrial material, when supply cut would meet the demand rising into the heating season. SHA above 3000 looks shaky and we suggest reduce of risk exposure to those cyclical shares, despite money chasing them in both equity and commodity market. We expected some dip with macro data release before the weekend and it could present some better buying opportunity then than that of current level.


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