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Comment For China Stock Market 2016/07/19

China stocks weakened for a fourth day in a row with SHA declined about 0.23%.The lack of China data this week made investors hang on the weak reading of real estate sales in the previous weekend and it put pressure on equity. Money flowed out of Wine Brewing, Real Estate and Petrochemical sectors the most. Hainan Automobile Co., rallied to limit-up for a fifth time in a row as investors continued to load up with newly listed shares with a relatively low market value. CNYUSD consolidated around 6.69 level after the slump Monday as investors believed that PBOC may interfere at 6.70 threshold yet we considered that the fall of RMB could go on into Q4.In commodity market, the crash of rebar and iron ore continued for another day on the weak real estate sales data yet zinc and nickel rose as the supply getting tighter. Investors also stick around gold futures as they saw no sign of Fed rate hike on the horizon. As the shock of Brexit fading away, the money became directionless and biased to risk-aversion mode. We suggest investors to cut risk exposure further when SHA touches 3030~3050 region until we can see some sign of further stimulus offered by China gov.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.