Market review:

China stocks generally stayed firm after a volatile trading day, with SHA rose about 0.16%.Gov released a grand plan for 165 major infrastructure projects for the next 5 year and it did provided some much needed support for the equity market.

Research Notes:

Money flowed into Telecommunication, Hotel and Airport sectors. Liaoning Fangda Chemical (000818.sz), an alkali products producer, rallied to limit-up as it released a plan to expand into defense industry. DXY still trapped in a bearish trend despite some hawkish talk of Fed officials.

CNYUSD also stayed sideways as no much new macro data on China this week and all eyes of investors should focus on the US GDP data. In commodity market, iron ore led the rally, followed by coal and plastics, with the boost from the infrastructure plan of gov. Rubber and egg futures led the decline, with weaker than expected demand. The seasonality of egg ‘d failed to support its price as producers want to sell the products faster in recent hot weather. As G20 meeting approaching, money ‘ d also speculated on the environment protection sector as well as new energy sectors, in the belief that the meeting could be a show case of the Green Economy of China. We maintained mid-term target for SHA 3200 but for this week investors should be cautious on better than expected US macro data could reinforce the expectation that Fed could change its stance in Sep or Dec.

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