Market review: May 30, 2016

Fang • submitted 2016-05-30 15:31:05

Market review:

China stocks generally stayed stable as investors cautioned before China PMI release. Market expected China PMIs of May to decline as Gov tried to cool down the frenzy of loan expansion in Q1.

Research Notes:

Money flowed into Finance, Plastics and Furniture sectors the most. China CEC CoreCast Corporation (600764.sh) rallied to limit-up as investors got bullish on its electronic payment business.

In commodity market, rapeseed meal, corn starch and corn futures rallied about 4% as a new round of storm in Southeast China may hurt the yield of field crops. The weather premium had been supportive to agriculture products and could tight the hands of PBOC in the summer and autumn, which could lead to a new round of long commodity- short equity trade, in our opinion. In this scenario, investors should avoid those construction material stocks and try overweight those stocks benefit from a rising CPI.As Fed meeting for June ‘s barely 2 weeks away, investors should stay patient and the buying opportunity could come as investors dump more share around the FOMC date, with SHA possibly touching some level below 2800.

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author: Fang

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