China COVID Cases Rising Again
Fears are growing over the potential for fresh lockdowns in China amidst report of a new surge in COVID cases there. Following the recent removal of social restrictions which had been in places in regions of China for months earlier this year, the government is now battling a fresh outbreak with cases having risen 600% in recent days.
President Xi Jinping last week reaffirmed his commitment to following the “zero-COVID” policy, noting that the government would accept some short-term damage to the economy over the broader risk to human life in the world’s second most populated country. With cases now on the rise in eastern provinces, a fresh lockdown was announced in Anhui on Friday. The situation is now being closely monitored for risks of broader lockdowns being introduced which would no doubt rock risk sentiment heavily. Investor appetite was knocked firmly lower across the lockdowns seen in China earlier this year and similar impact can be expected if we see lockdowns in any major cities or key regions. Leaders have warned that Macau is at risk of lockdown pending the results of three mass-tests to be carried out this week.
Technical Views
Shanghai Composite
Following the reversal higher off the YTD lows, the Shanghai Composite has now broken out above the bear channel from YTD highs and above the 3347.6880 level. While above here, the focus is on a continuation higher and a test of the 3499.9393 level next. This will be a key test for the index and failure here might see a deeper pull-back develop.
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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.