This week China has vowed to keep stock markets stable by saying that China will keep ‘stock markets stable’. It has also been said that China will adopt effective policies to handle developer risks. Furthermore, China Securities Journal noted that an interest rate cut window is not completely closed and that China could still adjust rates. There was also news from a China think tank that said China should cut rates to stop the equity rout and should buy blue chip stocks with social security funds.
So, is this time to start looking at buying China’s 50 index? FTSE China 50 has a reasonably strong seasonal patch now from March 19- April 19.
Over the last 11 years, China’s FTSE 50 has risen 8 times between March 19- April 19. The percentage of winning trades has been 72.73% and the average gain has been 3.42%.
Major Trade Risks: An aggressive rate hiking cycle by the Fed would also weigh on global stock prices.