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Market review: May 06, 2016

Fang submitted 2016-05-06 15:31:05

Market review:

Here’s the idea about the plunge in the morning session: 1,commodity in blood bath, 2,rmb weak, 3,US labor number incoming, 4, week end selling, 5,too many data the next week 3000 point is a tough resistance to overcome and not sustainable.

Market review:

China stocks fell with SHA declined about 2.8% before the release of many macro data the next week. Investors expected China CPI in April continue to climb with new loan growth rate decline from Q1 height, which is a combination damps the risk appetite.

Research Notes:

Money outflowed from Petrochemical, Electronics and Coal Mining sectors the most.Fujian Zhonghe Corp (002070.sz), a cotton leisure wear producer, rallied to limit-up for its expansion into new energy business.

As the slump in commodity market continued, it seems that investors are getting tired of the liquidity injection stories and once again to price in the slowing down of the demand for raw material in China. We believed that the falling of coal and iron ore prices can go on into May and the process itself, though bearish at the first glance, can persuade some money return to the equity market, which falling to the lower bound of the trading range. As SHA approaching 2900, in our opinion, it’s time again to own some consumer staples and agriculture sector shares, to position for summer demand and weather surprise.

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