According to the Market Matrix (Matrix.net), the rebound of China (CHN) stock has begun to lose momentum, indicating that just reopening headlines will not drive the next market rebound. After
soared more than 8% on November 11, the daily gains of for mainland stocks listed in Hong Kong (HKG) were lower than the previous day, even if reopening was in progress. While volatility remains one of the world's highest markets, strategists show cautious optimism after a rapid rise.
And the latest data reminds people that retail sales and industrial output shrank last month as the COVID-19 infection surged. With the initial excitement surrounding reopening now disappearing, traders are awaiting the results of this week's key policy meeting and assessing the latest economic and liquidity data to assess the growth potential of China's economy when it reopens.
Chinese stock markets are rising due to reopening _By Bloomberg
Tasty Trade's global macro head, said: "People generally doubt what this means to improve economic activity, as the lifting of restrictions will also see an increase in cases."
Hang Seng China Enterprise Index fell about 4% so far this week as investors took profit after gaining about 14% in the past two weeks. And Fed (Fed) hikes interest rates again this week is expected to make Hang Seng Index record its biggest single-week decline since October.
, market strategist at Saxo Bank, said: As the world's second largest economy, , relaxed its epidemic control measures in November, stocks listed in Hong Kong have risen more than 30% from their recent lows. However, as the infection spreads, full reopening could be delayed by a large number of workers taking sick leave. "In view of the increase in infections, investors will reduce reopening of transactions," said Dai Min, strategist at
Morgan Stanley . ”
Still, many asset management companies are still optimistic about the Chinese stock market because the potential impact on economic growth is only temporary. At this point, given the low position of China fund , any pullback in the market is still seen by many as a buying opportunity.
BNP Paribas (BNP Paribas) said this week that Hong Kong stock market is expected to rise by more than 10%. HSBC Holdings (HSBC) Holdin-gs said mainland indicators will rise 19%, with expected earnings growth expected consistent.
Nevertheless, this forecast for 2023 is conservative for a market that needs to nearly double from current levels to reach its peak in early 2021. “We have not even started to see any improvement in economic data or profit escalation, so it seems too early to exit this market.” ”
The bank said that before investors reassess further gains, MSCI China Index could hit the 71.5 level, up about 10% from the current level. Christina Wuen, director of Asian equity investment at
Abrdn, said: “The news of reopening may not be enough to drive another soar. As we have seen in other reopenings, cases surged at the beginning and hospitalizations rose. We have to observe how the government manages this. Any policy reversal now will be detrimental to market sentiment, and the market is very cautious about this. ”
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