Today's Asia-Pacific session has been upbeat, with the majority of indices from the region trading higher. The biggest gains could be spotted on Chinese indices, especially Hong Kong indices, like HSCEI (CHN.cash). The index gained almost 3% today and moved to the highest level since late-November 2023. There was no specific news on China today that could justify this jump.
China has set its 2024 GDP growth target at 'around 5%' at last week's top economic meeting, similar to 2023. This would most likely require a large amount of stimulus, as the economy will no longer benefit from positive base effects coming from pandemic exit. China's President Xi Jinping said that the country will focus on supporting high-growth tech industries rather than on a debt-driven expansion as it was the case before. This would hint at more support towards companies like chipmakers or EV manufacturers. However, no major stimulus announcements were made. Nevertheless, it could still explain, at least to some extent, an improved sentiment towards Chinese equities we are observing since the middle of the previous week. Today's gain is also driven by improved sentiment towards Chinese EV companies after Xiaomi shares soar 12% following the announcement that the company will begin deliveries of its electric vehicles this month.
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Create account Try a demo Download mobile app Download mobile appTaking a look at CHN.cash chart at D1 interval, we can see that the index is approaching a resistance zone in the 6,000 pts area, marked with 200-session moving average (purple line) as well as the 38.2% retracement of the downward move launched at the beginning of 2023. A point to note is that the index is trading over-20% above late-January 2024 lows, meaning that it has entered a bull market territory. Moreover, CHN.cash broke above the 5,930 pts today, a level that marks the upper limit of the Overbalance structure. A break above this hurdle is another sign of a bullish trend reversal on this market.
Source: xStation5
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