China Stocks Arrest Steep Decline -- at Least for Now

Gene Linn |

china mobileChina stocks’ long-running consolidation threatened to get ugly this week, but good results from a telecom giant Thursday helped stop the downward slide.

The Hang Seng Index in Hong Kong turned early losses into a 0.3% gain to 22,619 after China Mobile (CHL) offered good news with better-than-expected earnings. The index of Chinese companies rose 0.6% to 11,102.

The market was already in the grip of a month-and-a-half consolidation when poor Chinese economic statistics plus Increased tightening by China’s central bank drove the Hang Seng 535 points lower the first three trading days this week. A steep drop by Hong Kong properties Thursday due to bank mortgage rate increases seemed sure to extend losses until China Mobile’s good results helped the index regain its footing above the 100 -day moving average of 22,556.

But the worst may not be over, according to Dickie Wong, executive director of research at Kingston Securities. He told Equities that if the Hang Seng slips below the 10-day moving average, it could test 22,000 in the worst case.

Even defensive stocks like utilities, normally a safe haven in a downturn, have been weak lately due to profit-taking from earlier rises, Wong said. Asked if any sector or stock looked good in the short term, he replied, “Not really.” End

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
CGNX Cognex Corporation 53.14 0.49 0.93 170,778

Comments

Emerging Growth

International Western Petroleum Inc

International Western Petroleum Inc is an exploration-stage oil and natural gas company. The Company is engaged in the acquisition, development, and exploration of crude oil and natural gas properties in…

Private Markets

Lyft

Lyft matches drivers using their own personal vehicles with passengers who request rides through the smartphone app, and the passengers pay automatically through the app. When using Lyft, passengers have…

Snapchat

Snapchat is the fastest way to share a moment with friends. The mobile app, allows users to not only share photos with friends but also control how long they can…