By Samir Al Khoury,
Chinese economic data is currently mixed, with several factors weighing on Chinese stocks, including:
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New loans fell to 260 billion yuan, below expectations (1,280 billion yuan) and the previous reading (2,130 billion yuan), indicating weak Chinese consumption.
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Fixed asset investment fell 3.6% YoY, below expectations and the previous reading (3.9%).
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Industrial production fell 5.1% YoY, below expectations (5.2%) and the previous reading (5.3%).
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Unemployment rose to 5.2%, above expectations (5.1%) and the previous reading (5.0%).
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Exports fell 7.0%, below expectations (9.7%) and the previous reading (8.6%).
However, despite these negative factors, there are positive factors that may support Chinese stocks, such as:
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The consumer price index rose on an annual basis, recording a growth of 0.5%, which exceeded expectations (0.3%) and the previous reading (0.2%).
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China’s foreign exchange reserves rose to $3.256 trillion, which exceeded expectations (3.250 trillion) and the previous reading (3.222 trillion).
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The import index rose to a growth of 7.2%, which exceeded expectations (3.5%) and the previous reading (-2.3%).
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Chinese stocks are very low compared to other global stocks such as Japanese and American stocks. For example, the Hang Seng Index’s P/E ratio is almost 10.
As for Chinese stocks, the Hang Seng Index rose for the second day in a row, recording 17,473 points today, its highest level since July 24, 2024. The biggest challenge is to reach and break the 50-day moving average, which stands at 17,612 points.
Technical indicators seem to support the Hang Seng Index in the coming period for several reasons:
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First: The 20-day moving average in gray, which stands at 17,120 points, is approaching the 50-day moving average in blue, as the gap between them has begun to narrow further. Any bullish intersection or Golden Cross that occurs between them could indicate an upward trend for the Hang Seng Index.
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Second: The Relative Strength Index (RSI) is currently at 53 points, indicating the bullish momentum of the Hang Seng Index.
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Third: The MACD indicator in blue is crossing the Signal Line in orange.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice.
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