China stocks stay on a roll, breaking through resistance level of 3,000 for first time since June
- Traders are watching for opportunities out of the Two Sessions gathering in China of the power elite
- Hang Seng rises as well as sentiment is buoyed by positive news on trade war
Chinese stocks closed at their highest level since June on Monday, a day before the country’s annual political summit begins and as a trade deal with the US was reported to be close.
The Shanghai Composite gained 1.12 per cent by close, or 33.57 points, to 3,027.58, breaking the 3,000 resistance level it last breached in June, back when the trade war really started heating up.
Optimism over the trade war and anticipation of this week’s annual political summit in China powered mainland stocks, spilling over into wider Asia.
Technical measures are pointing to a surging market. The Shanghai bourse’s 14-day relative strength index (RSI), a momentum indicator which measures closing prices, climbed to 82 on Monday. It reached 84 at the same time last week, before dipping slightly through Friday. The readings are the highest since April 2015, and well above the level of 70 that indicates overbuying.
The CSI 300, meanwhile, rose 1.18 per cent, or 44.39 points, to 3,794.10.
Mainland markets are strong enough to help Hong Kong maintain its current level in the short term while policy decisions play out in Beijing this week, said Castor Pang Wai-sun, head of research for stockbroker Core Pacific-Yamaichi.
