UpdateMainland China shares on track for gains in Year of the Rooster
Further gains could be in store for Shanghai’s Composite Index, following a 14.3 per cent advance in the Year of the Monkey
Mainland stock markets are poised for further gains in the Year of the Rooster, according to analysts who say the post-holiday resumption of trade on Friday will likely continue the upbeat tone that lifted stocks in the recently-ended Year of the Monkey.
The upbeat factors, they say, include a recent strengthening in the yuan and signs of a stabilising economy, but upside may be capped amid concerns of continued liquidity tightening.
The Shanghai Composite rose for a fifth straight day on January 26 to close the Year of the Monkey up 14.3 per cent at 3,159.17. The Shenzhen Component Index also snagged a 3.8 per cent gain for the year.
“I think the Shanghai Composite Index will consolidate the recent rally and possibly advance 1 to 2 per cent on the first day [of post-holiday trade],” said Ben Kwong, executive director of KGI Asia.
“The sentiment is generally upbeat, as the yuan has firmed amid a softening US dollar,” he said.
The US Federal Reserve on Wednesday decided to keep interest rates unchanged, as expected, at the conclusion of its first policy board meeting of 2017. The policy board did not indicate explicitly the timing of the next rate increase in its post-meeting statement.