China A50

A potential bearish reversal pattern suggests a drop to 7900 for the ASX, but only if it clears a support cluster first. China's A50 still looks solid above 13k to my eyes, despite yesterday's selloff.

Hang Seng and China A50 futures delivered obvious bullish reversal patterns on Friday, hinting the unwind from the recent highs may have run its course. While some may say the rebound was driven by stronger-than-expected Chinese economic data released during the session, both moves started from known levels, suggesting it may have been technical in nature.

China’s markets shot out the gates in reverse on Tuesday, with traders seemingly disappointed that Beijing had not unveiled another round of stimulus. Not only did that see China's equity markets plunge in the double digits, but oil prices were also falling on lower production forecasts and easing of Middle East concerns.

China A50 has broken a multi-year downtrend amid new efforts by China to achieve a 5% rate of growth for 2024. Battle lines drawn on the weekly technical chart.

China’s A50 index is mirroring the 2014-2015 surge, the last time policymakers enacted coordinated fiscal/monetary/macroprudential stimulus measures - what does that mean moving forward?

Hang Seng and China A50 stock futures continue to rip higher, benefitting not only from continued panic buying following last week’s monumental surge but also the fact they have resumed trade with mainland markets still closed for golden week holidays.

The China A50 is up an impressive 16% this week already thanks to the latest round of stimulus from China. While this helped the ASX to a degree, it likely needs a soft US inflation report to break and hold above record high.

Chinese regulators will slash interest rates, free up cash for banks to lend and implement measures to support the stock market, designed to help address flagging economic activity and inflation. However, none of the moves directly boost demand, raising questions about just how effective they may be in delivering a sustainable improvement in sentiment.

China A50 stock futures have been hammered on Thursday, as have most other equity futures across Asia. The US dollar is breaking out as US Treasury yields push higher, seeing traders abandon riskier positions ahead of quarter-end. The baby is being thrown out with the bath water.

The Hang Seng enjoyed its best day in three months. And with key support levels for the China A50 and ASX 200 holding, perhaps they can try to close the gap this week.

The China A50 has shown early signs of stabilising around support levels after a 4-week decline. The bear case for the Nikkei is not dead, but it may be sleeping whilst it remains rangebound on the weekly chart.

China’s services sector strengthened in May, boosting Chinese equity markets and providing some respite for commodities such as copper and WTI crude oil.

Chinese stock futures have surged on the resumption of trade on Monday, finding buying support after hitting multi-week lows on Friday. If the gains stick, it points to a potential trend change in both the Hang Seng and China A50. The gains track similar moves across the Asian region and follow a late surge on Wall Street to end May.

It’s said the stock market isn’t the economy and based on the performance of Hang Seng futures on Wednesday, it’s hard to argue against. Because on the same day the International Monetary Fund upgraded its China economic growth forecast, stocks in Hong Kong are getting hammered.

Chinese economic data is beating expectations at rates not seen since reopening to the world in 2023. And with the government and People’s Bank of China playing an active role in supporting mainland markets, it’s not surprising to see Chinese assets performing comparatively better than others across Asia right now.

Bull markets are born on pessimism, grown on scepticism, mature on optimism, and die on euphoria. The stealth rally in China's A50 and Hong Kong's Hang Seng is keeping to the script.

The bear market in Chinese equities may be coming a state-endorsed end with A50 futures breaking the downtrend dating back to early 2021 earlier this week. The 200-day moving average may be the next bearish indicator to give way, bolstering the view that the lows may have already been seen.