Market review:
China stocks declined after 3 days of rally as investors reacted to hawkish Fed statement and also some profit taking before the incoming People’s Congress.
Research Notes:
SHA fell about 0.3% with money outflowed from cement, construction and finance sectors the most. GEM Co.(002340) rallied to limit-up as cobalt, one of its major product, got the price up about 20% since year 2017.
DXY climbed to 101 overnight yet CNYUSD stayed firm with Shibor rates touched new highs, showing the money supply tightening at least for the interbank market. In commodity market, coal, manganese alloy and wheat led the rally, with some rust disease reported for China wheat growing regions. Yet most commodities declined for the strong dollar.As people’s congress approaching, we would pick medicine, food safety and one belt one road sectors as the ones most likely get boosted by the conference. But in the short term some selling of cyclical shares could push SHA lower towards 3180~3200 level, where buying opportunity could reemerge.
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