(Bloomberg) – China’s CSI 300 index settled an earlier loss of as much as 2% as investors chased good deals, as well as seeking signals from the National People’s Congress, which began on Friday.
The meter was slightly changed at. 14.27 in Shanghai, and the mainland’s largest stock, Kweichow Moutai Co., was the strongest positive contributor. CSI is close to avoiding a technical correction after previous losses extended to more than 10% from the top 10 February.
“Today, the mood is a buy-in dip, with Moutai hitting 2,000 yuan being a trigger,” said Zhang Fushen, senior analyst at Shanghai PD Fortune Asset Management (LLP). “All the expensive sectors have fallen significantly and are threatening to destroy their upward trend, but without a massive change in fundamentals and expectations, there is no reason for them to fall further and turn from bull to bear.”
Shares in spirits producer Kweichow Moutai rose as much as 3.1%, reversing an earlier decline of 2.2%. Its peers Wuliangye Yibin Co. also rose.
The CSI 300 fell the most since July Thursday, while a two-week volatility target rose to a seven-month high as investors worried about liquidity tightening and official concern over possible asset bubbles. The recent routine is driven by consumer styles, where the sub-meter has dropped approx. 20% since February 10th.
Moutai’s $ 113 billion tumble hammers Chinese mutual funds
China set an economic growth target of over 6% for the year, well below what economists predicted, and outlined ongoing fiscal support with prudent monetary policy. The government will limit the budget deficit to 3.2% of gross domestic product this year from 3.6% by 2020, Prime Minister Li Keqiang said on Friday at the opening of the NPC.
The GDP target is “by no means a low figure and the earnings of the country’s best companies will definitely exceed it,” said Chen Shi, a fund manager at Shanghai Jade Stone Investment Management Co. “Markets globally have become far too pessimistic in terms of liquidity and, in fact, they may be scaring themselves too much.”
Meanwhile, it was quiet Friday in currencies and exchange rates. The Landyuan was slightly changed to $ 6.4751 per dollar. The yield on China’s 10-year bonds was also slightly changed at 3.26%.
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