Chinese indices recover losses in euphoria 📈 gains 4.1%

12:21 PM September 22, 2023

Futures contracts on Chinese indices rallies after UBS and Goldman Sachs optimistic comments about furure China economy and stocks valuations. gains nearly 3.8% against's 3% rally

  • According to Goldman Sachs, recent macro data from China including exports, inflation and economic activity indicate that economic growth and inflation are over the worst, potentially supporting a rebound in the second half of the year 
  • Foreign investors bought back shares worth $1 billion - a record amount in 7 weeks
  • According to UBS, the latest macro data although still weak is not that significant as the credit impulse and production seem to bode well for China's economy.

According to UBS, Chinese  indices have risen an average of 8 percent in next three months after large sell-offs on the Chinese stock market. According to Swiss bank analysts, the Chinese stock market's price probably bottomed yet and investors should be more optimistic about China because Beijing is determined to stimulate growth. In a note, UBS also stressed that valuations of Chinese stocks have fallen to much more encouraging levels. According to BCA Research, the current macro circumstances are still too good for the authorities to decide to provide much stronger support, on a broad scale.

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Technical analysis

The index stopped the downward momentum in the zone of the lower limit of the downward channel, and at the moment the demand side is trying to bring the benchmark into the zone of resistance marked by the 50% Fibo retracement of the upward wave initiated in October 2022 and the 50-day exponential moving average (blue curve marked on the chart). Source: xStation 5

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