Notes From Hong Kong: The Lunar New Year Rally May Be Over
Early this week, Hong Kong should give us a good indicator of the performance of the Shanghai market when it reopens on Wednesday and possibly for the coming weeks. The Lunar New Year rally of the past ten days has been largely fueled by higher commodities prices. Oil price weakened on Friday and further weaknesses this week will reflect on the performance of the stocks that were leading the Shanghai and Hong Kong markets last week.
INDICES
1 week
4 weeks
YTD
Hang Seng Index
1.2%
0.9%
3.8%
HS China Enterprises
1.2%
-1.7%
0.1%
FTSE/Xinhua A50
0.9%
-1.4%
-0.0%
Shanghai Composite
1.7%
-1.4%
-0.3%
CSI 300
1.3%
-2.8%
-1.6%
US ETFs
2.3%
-1.0%
3.6%
2.0%
-1.7%
-0.5%
3.0%
1.9%
4.4! %
Despite the small drop in the PMI figures released last Tuesday, the Chinese market was still reacting positively to the global recovery in manufacturing and pricing in higher demand for commodities and materials. The CSI300 Materials sector surged 2.9% in the two trading days led for instance by Fangda Carbon New Material, up 17.5%, a manufacturer of advanced carbon materials. Oil prices also boosted the Energy sector 2.8% while expected sales of food and beverages during the Lunar New Year holidays pushed the Consumer Staples sector up 2.2%, led by Chongqing Brewery, up 5.9% and Kweichow Moutai, up 4.4%.
SECTORS CHINA
1 week
4 weeks
YTD
CSI300 Energy
2.8%
-3.7%
-3.0%
CSI300 Materials
2.9%
-5.3%
-6.1%
CSI300 Industrials
1.0%
1.5%
3.1%
CSI300 Cons. Discretionary
0.6%
-2.7%
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