Market review:
China stocks posted the biggest since Aug 15th with SHA climbed 1.45%.The curb of real estate market had encouraged investors to relocate money into other risky assets, such as equity and other derivatives.
Research Notes:
Money flowed into Software Development, Electronics and Chinese Medicine sectors the most.Wuhan Steel(600005.sh) limit-up as it pushed forward to merge with Baoshan Steel to form the biggest steel company in China. It’s also part of the SOE reform that gov promised in Q4.
DXY kept the strength around 96~97 region as investors expected FMOC minutes this week will reveal that Fed determined to rise the rate in Dec. CNYUSD slumped to 6.7 with interbank rates declined significantly, especially for the short term borrowing rates. In commodity market, methanol, plastic and natural rubber led the rally as they reacted to the spike in crude oil prices during the holiday. Gold, silver and glass declined the most, for investors priced in the strong USD and cooling of property market. Though the rally is strong in the equity market, it would take some time to spot the most promising sectors. We eyed on new energy, information security and medicine for now. The time left for this year is quite limited and 3100~3150 is our estimated target for SHA, given the US election and FOMC still present pressure ahead.
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