Police & Protestors Clash
Chinese stock prices gapped lower at the open this week amidst news of growing unrest there. Protests rose up over the weekend, spreading across multiple regions over three consecutive days, in response to the government’s zero-covid policy. The biggest wave of civil unrest in China over the last three decades comes on the back of accusations that the government’s strict covid measures led to the deaths of 10 people in a tower fire in Urumqi. However, the initial protests have since spread and grown in size with many now suggesting that the focal point of the government’s covid measures is actually a metaphor for wider dissatisfaction with the Xi regime.
China Covid Approach
Scenes of Chinese police clashing with protestors have sparked uncertainty across markets. With the government having recently announced fresh lockdowns in China, it would likely take a scaling back of its covid approach to assuage protestors' demands. Meanwhile, if protests continue, risks of further clashes and worse begin to increase. For now, traders are monitoring the situation carefully with risk assets coming under pressure at the start of the week and safe-havens rallying amidst a flight to safety.
Technical Views
Shanghai Composite
For now, the index is sitting on support at the 3043.18 level having been capped by the latest test of the bear channel top. With momentum studies waning, risks of a downside break are growing, turning support back to the current lows around 2867.19. However, if bulls can build once again from current support, 3185.92 is the next upside objective.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.