CHN50 Slides on Renewed Property Woes
CHN50 Analysis
The stream of discouraging economic data from China continued this week. The country now grapples with deflation, while imports and exports registered their biggest fall since the height of the pandemic. The poor economic releases point to a faltering recovery of the world's second largest economy.
The country's important, but also troubled real estate market, is a key piece of the puzzle. Chinese authorities have already extended policies that support the sector [1] and have pledged to do more. However, more bad news were in store today. Prominent property developer Country Garden warned that it could report a loss of RMB 55 billion (around 7.6 billion USD) of the first half of the year. [2]
This warning sent its stock to new record lows weighing on China's stock markets. CHN50 sheds around 2% and keeps this year's lows (12,261) in the spotlight. The daily Ichimoku Cloud could provide some reprieve though. The poor economic data and the renewed fears around the property sector, could force authorities to step up efforts to prop the recovery. This could help CHN50 rebound back towards 13,601, but we are cautious around the ascending prospects.
The index has tracked closely the country's reopening and subsequent recovery fears, as it registered a significant rally from November as the country shifted away from the strict-zero corvid policy and made a strong 2023 start. However, it has since erased the gains, weighed by the disappointing data of the past few months and trades flat on the year.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
References
| Retrieved 11 Aug 2023 https://english.www.gov.cn/news/202307/11/content_WS64aca4ffc6d0868f4e8ddac0.html | |
| Retrieved 18 May 2024 https://www1.hkexnews.hk/listedco/listconews/sehk/2023/0810/2023081001200.pdf |
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.