Posted by Keyman188 > 2019-02-25 14:52 | Report Abuse

China Stocks’ Trillion-Dollar Rally Pushes Another Index Toward Bull Market

A $1 trillion rally in Chinese stocks has another equity gauge headed for a bull market.

The CSI 300 Index rose as much as 4.6 percent Monday, extending its gain from a Jan. 3 low to more than 20 percent -- the level that typically denotes a bull market after a drop of the same size. The gauge of shares listed in Shanghai and Shenzhen is still around 16 percent below its 2018 peak.

China’s small-cap ChiNext Index entered a bull market Friday, and jumped as much 5.6 percent on Monday to its highest since August. Investors are embracing risk as the U.S. and China appear to be making progress on trade talks and after the new head of the country’s securities watchdog lifted some trading curbs. A measure of margin debt in China’s stock markets is rising after hitting its lowest level in more than four years on Feb. 1.

"Even if stocks retreat in the short term, there’s still room for further gains as leverage is still way below the peak despite the increase," said Shen Zhengyang, a Shanghai-based strategist with Northeast Securities Co. "Investors also have to bear in mind that economic fundamentals are still bad, so in order to avoid getting burned in a likely more volatile market, it’s key to always remain wary."

The change in investor sentiment has also boosted the yuan, which is the best performer among major currencies since Feb. 1, strengthening 0.9 percent against the dollar. The currency was up 0.4 percent at 6.6888 as of 1:22 p.m. in Shanghai.

Posted by Keyman188 > 2019-02-25 15:05 | Report Abuse

Shanghai charges into a bull market after Trump declares delay in tariff increase

~ Shares in mainland China jumped in afternoon trade, as the Shanghai composite entered a bull market.

~ Stocks in the rest of Asia also gained.

~ U.S. President Donald Trump announced in a series of posts on Twitter Sunday evening that America is planning to delay a set of additional tariffs on Chinese goods that were due to kick in on March 1.

Stocks in Asia mostly traded higher on Monday afternoon amid trade optimism after U.S. President Donald Trump announced a postponement of a closely-watched deadline on March 1.

Shares in mainland China saw solid gains in afternoon trade following the positive developments. The Shanghai composite, Shenzhen component and Shenzhen composite all surged more than 5 percent.

Those moves took the Shanghai composite into bull market territory, or up 20 percent from intraday lows seen in early January. The Shanghai composite fell into a bear market, or down 20 percent from a recent high, in June 2018.

Over in Hong Kong, the Hang Seng index rose 0.44 percent as shares of China Construction Bank gained around 1.6 percent. Hong Kong-listed shares of Chinese network equipment firm ZTE advanced more than 2.5 percent, after leaping 13.9 percent earlier, according to Reuters.

Chinese markets in general have posted strong gains so far in 2019, the Shanghai composite, for example, is up more than 18 percent year-to-date and even the smaller CSI300 has surged more than 20 percent year to date. That surge since the start of 2019 led investment bank UBS to caution investors that the market has gone "a long way ahead of fundamentals."

In Japan, the Nikkei 225 advanced 0.48 percent to close at 21,528.23 and the Topix rose 0.71 percent to finish its trading day at 1,620.87. Shares of index heavyweight Fast Retailing, the company behind the Uniqlo chain of apparel stores, gained 0.67 percent.

Australia's ASX 200 and South Korea's Kospi also ended their trading days higher.

The broad MSCI Asia-ex Japan index rose 0.58 percent to 527.58 as of 2:33 p.m. HK/SIN.

"As both (the U.S. and Chinese) Presidents said significant progress has been made, the chance for the US and China to reach a deal is getting higher," OCBC Treasury Research said in a morning note. "However, the key to medium term stability hinges on two areas including agreement on China's structural reforms and the enforcement of trade deals."


US-China trade hopes

U.S. President Donald Trump announced in a series of posts on Twitter Sunday evening that America is planning to delay a set of additional tariffs on Chinese goods that were due to kick in on March 1.

In his posts, Trump cited "substantial progress" in bilateral talks between the world's two largest economies, including intellectual property protection and technology transfer issues. As a result, the president said he would suspend the new levies, however he did not state a new deadline.

"President Trump announcing a delay in raising tariffs on Chinese imports has been in the works for some time. The high frequency engagement between Beijing and Washington at a senior level implies that both sides are looking for some form of settlement," Tai Hui, Asia Pacific chief market strategist at J.P. Morgan Asset Management, said in a note.

"Moreover, with growing questions over the growth outlook in the U.S., further tariff escalation would add more uncertainty to this concern. Still, there are plenty of long term structural issues for both sides to lock horns over, such as market access and (intellectual property rights) protection," he said.

The U.S. president's comments came following extended trade negotiations between officials from Washington and Beijing. Talks had earlier spilled over into the weekend after both sides reported progress in narrowing their differences.

Last week, sources familiar with the situation told CNBC that the United States and China are discussing a late March meeting between Trump and Chinese President Xi Jinping in Florida.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.473 after touching highs above 96.9 last week.

The Japanese yen, often viewed as a safe-haven currency, traded at 110.65 against the dollar after touching lows above 110.8 last week. The Australian dollar changed hands at $0.7143 after seeing turbulence last week as it swung between highs above $0.720 and lows below $0.710.

The offshore Chinese yuan also saw gains, on the back of Trump's announcement, last trading at 6.6879 against the dollar. Its onshore counterpart changed hands at 6.6873 against the greenback.