China stock markets a focus for today's trading
Both the Australian and Chinese stock markets closed on their lows at the end of a weak trading session yesterday. The immediate question for markets this morning will be whether yesterday's selling momentum can be arrested.
Both the Australian and Chinese stock markets closed on their lows at the end of a weak trading session yesterday. The immediate question for markets this morning will be whether yesterday’s selling momentum can be arrested.
Local market sentiment is likely to be influenced by what happens on the Chinese Exchanges today. Investors remain particularly sensitive to developments in China after last week’s currency devaluation and are looking for comfort that things are not worse than they seem.
News that average property prices in China have now risen for three months in a row is a mild positive for China’s demand outlook. Property gluts typically take a considerable time to resolve and much of the problem is concentrated in second tier cities. Even so you have to start somewhere and the fact that property prices are starting to rise in some of the major cities may be a start in the process of the market bottoming out. At the very least, it represents and advance on the situation earlier this year when prices were falling across the board.
The profit reporting season has so far revealed a difficult growth environment with more than its fair share of negative surprises at this stage. This is likely to see caution on earnings expectations for next year providing a cap on market rallies for some time yet.
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