After the weekend, Chinese markets are still closed, nevertheless tomorrow Golden Week will come to an end and trading will resume on mainland Chinese indices. Nonetheless, the Hang Seng, which is trading normally, extends its upward wave today, adding more than 1.5%. More PBoC establishment conferences are scheduled for tomorrow, which will consider how to implement further stimulus tools for the Chinese economy in the long term.
Sentiment today is further supported by Goldman Sachs bank, which upgraded Chinese companies (represented by the MSCI China Index and CSI 300 Index) to an “overweight” rating. According to analysts, stocks from the region could rise another 15%-20% if the authorities fulfill their policy promises. As the bankers added, valuations are below historical averages, earnings could improve, and global investor interest remains low. Tomorrow, the National Development and Reform Commission will hold a press briefing on measures to implement policies aimed at boosting economic growth.
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Open account Try demo Download mobile app Download mobile appThe HKcash index has been on a near-vertical upswing, having surpassed the 2023 peaks with its magnitude. Moreover, the RSI index for the 14-day average now stands at 81.5, the highest indication since 2020. It seems that to maintain the upward momentum, the key in the short term may be whether the PBoC will actually announce further stimulus solutions. Otherwise, given the magnitude of the increases, we also cannot rule out a technical correction on the index.
Source: xStation
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