Market review:

China stocks declined before the US presidential debate tonight with SHA fell about 1.67%, lost all ground since Aug 9th.

Research Notes:

Money outflowed from all the sectors with Electronic Devices, Software Development and Petrochemical sectors seen the money escaping the most. Guangdong Jialong Food Co.a chicken product manufacturer, rallied to limit-up as it offered a generous dividend plan after the mid-term report.

DXY generally stayed unmoved around 95.4 as several Fed officials, including chair Yellen will speak this week and investors stay cautious before these events. CNYUSD weakened but still hold the 6.67 line as no much improvement seen in shibor and hibor with liquidity still tightened. In commodity market, cotton, coke and coal led the rally, as too much precipitation in US growing area delayed the cotton harvest and in China seasonal demand for coals surpassed the supply which suffered from gov restrictions. As this week ‘s loaded with macro events, we suggested investors to hedge some of their positions with derivatives, like index futures and options yet it’s also an opportunity to rotate into new energy and environment protection sectors as some stressed selling could create bargain of these shares. We believed the rebound could mostly happen after the China National Day holiday and the trading range could be 2950 to 3100 with downside risk increased this week.

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