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Market review: May 25, 2016

Fang submitted 2016-05-25 15:31:05

Market review:

Decline of China stocks continued as investors avoided risky assets on the expectation of Fed rate hike in June and the talk of delay of MSCI inclusion.

Research Notes:

Money outflowed from Electronics, Petrochemical and New Material sectors the most. Beijing Hualian Chain Store Corp (000882.sz) rallied to limit-up for it released its investment in recent popular Online Star and Singing Bar business.

CNYUSD declined to multi-year low showing the lack of confidence of China econ growth and even China gov’s believed to communicate with Fed to inquire about the time of rate hike.With the rally of USD, commodities also lost the charm and, in our opinion, would return to the lows before the rally in Q1.Though we may experiencing the last round of selling before the Fed meeting in June, it’s better to stay cautionary for SHA could dip under 2800 for a period of time. But we remain optimistic on some sectors with better growth perspective, new energy automobile industry showed a good example, and we believed both upstream and downstream of it can enjoy similar strength in H2.

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