China’s National Bureau of Statistics reported that China’s GDP grew at 6.6 percent in 2018, lower than 6.8% in 2017. Although China achieved its goal of 6.5 percent GDP growth set for 2018, its GDP grew at its slowest pace in 28 years. The data therefore sparked investors’ concern on global growth. Furthermore, China’s wave of bond defaults continues, with Kangde Xin Composite Material Group Co defaulted on a corporate bond. These lower investors’ desire to invest under the current market situation. Moreover, the US will formally request the extradition of Huawei Chief Financial Officer Meng Wanzhou from Canada, according to a Monday report, which may affect the ongoing trade war negotiation.
The Hang Seng Index (HSI) has rebounded over 2000 points since early January, while individual stocks and sectors have already recorded significant rebound from their recent lows. It is anticipated that the Chinese government will not carry out fiscal policies ahead of the forthcoming Chinese New Year holiday. The high-level talk between the US and Vice Premier Liu He at the end of this month is expected to lead to more uncertainties in the market. Investors are advised to be aware of potential profit taking risk.
National Bureau of Statistics