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The China Securities Regulatory Commission (CSRC) had described the recent rally in Chinese stocks as a ‘rebound’, and attributed it to an improving economy, more liquidity and market reforms.
There has also been optimism of further price upsides ahead of the planned link between Shanghai and Hong Kong stock exchanges.
They are all trading above their 50, 100, and 200 daily moving averages. The China A50 look set to test its resistance at the 7,685 point-level.
A stream of positive economic data has also been lifting sentiment. Last week, China’s manufacturing PMI came in above expectations at 51.7, which was a two-year high. Over the weekend, while non-manufacturing PMI showed a slower pace of growth, it marked another month of expansion.
While HSBC’s China Services PMI numbers today are usually not a market mover, investors are likely to get behind any reason to cheer the market with a lack of other local market catalysts this week until Friday’s trade numbers.
Ahead of the Singapore Open
Under the spotlight today on the SGX will be OCBC Bank. This morning the bank posted its largest quarterly profit in almost two years on loan growth and higher trading income. Net income climbed 54% to S$921 million.
Another one to watch will be CapitaLand, who posted a 14% rise in net profit on higher gains from investment properties despite lower revenue.
We are calling for MSCI Singapore to open 0.2% higher at 380.85 points, China A50 to open 0.19% higher at 7,473 points, and Hong Kong shares or Hong Kong HS50 Cash to open 0.36% higher at 24,679 points.