Market review:

China stocks declined as investors taking profit before the close of the Chinese Communist Party's key sixth plenum.

Research Notes:

Money outflowed from Electronic Devices, Software Development and Petrochemical sectors the most. Chalkis Health Industry Co.(000972), a tomato products manufacturer in Xinjiang province rallied to limit-up as Gov release a grand plan “Healthy China 2030” to support the firms which provide healthy products and service.

DXY seems shaky above 98 as overnight Europe PMI better than expectation and euro rebounded. CNYUSD also rose from the 6.78 low as China inter-bank market felt the tightness again at the end of the month with Shibor soaring.The investors are still uncertain whether PBOC will defend the 6.8 line. In commodity market, coal, aluminum and soybean led the rally. Investors came back to agriculture sector again to speculate some bumpy weather in South America growing season, a seasonal bet. The recent above average precipitation in Southern Brazil also arose some concern. In our opinion it’s unrealistic to expect the reform plan to be released to go above expectation and the recent rally of SHA ‘s a good opportunity for profit taking. Yet some sectors, such as SOE, fertilizer and pesticide and coal sectors could enjoy more policy support than others. We expected SHA to dip back around 3050 as US presidential election starts.

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