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Market review: September 22, 2016

Fang submitted 2016-09-22 01:15:14

Market review:

China stocks posted a second day of rally as Fed stayed put overnight.

Research Notes:

SHA rose about 0.54%, with money flowed into Real Estate, Wine Brewing and Petrochemical sectors the most.Fujian Longzhou Transportation Co.(002682.sz) rallied to limit-up as it started a restructure process to enter the e-commercial business of several petrochemical products.

DXY declined and barely hold the 95 line with Chairwoman Yellen announced no hike in September which left the month December as the only time window for the rate setting. Yet the uncertainty over economies, not only US, but also China and Europe could delay the move further into next year and we considered it could be a major drive for risk appetite. CNYUSD stabilized at 6.67 level with shibor o/n declined for PBOC increased the liquidity injection into inter-bank market. Cyclical industrial materials, such as iron ore, rubber and coke led the rally in commodity market, with agricultures fell with weather improved for US growing area. We maintained our expectation for SHA 3100 as risk-on sentiment of investors improved globally. We favored the new energy, SZ-HK link and electronic cars and related devices sectors which would benefit from gov support and macro trend. The only major uncertainty ahead is the US presidential election, but as it also keep Fed inact so generally we considered it as a minor factor for the mid-term.

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