Summary:
- Chinese stocks in Hong Kong rebound, attributed to technical factors after days of heavy selling.
- Hensheng index, down 8 percent this year, faces pessimism due to lack of significant positive economic news.
- Chinese government's call for increased intervention in U.S. market may not strongly affect equities.
- Quarterly Hensheng index revamp expected, with potential inclusions from consumer and pharmaceutical sectors.
- Country Garden's place in the index uncertain as the company grapples with possible default.
Chinese stocks in Hong Kong reversed all of their earlier losses yesterday, prompting questions about changes in sentiment. Traders attribute the rebound to technical factors, citing excessive selling in the Hensheng index over the past five days.
The Hensheng index, facing losses of 8 percent year to date, is ranked among the worst in global indices. The rebound is seen as a sign of seller exhaustion, although pessimism remains due to the absence of significant stimuli or positive economic data. Despite a Chinese government directive for increased intervention in the U.S. market, its impact on the equities market is uncertain.
The upcoming quarterly revamp of the Hensheng index is anticipated to introduce new additions in the consumer and pharmaceutical sectors. Analysts mention names like Lee Otto and Ushi Aptek as potential inclusions. Meanwhile, the fate of Country Garden, a company teetering on the edge of default, hangs in the balance within the index.