Rally for Hong Kong's China Shares is Intact on `Golden Cross,' CICC Says

Hong Kong-traded Chinese stocks will resume their rally as a so-called Golden Cross indicator remains intact and the decline in the benchmark index yesterday eased overbought conditions, said China International Capital Corp.

The Hang Seng China Enterprises Index, which tracks 40 Chinese companies traded in Hong Kong, fell 2.8 percent to 13,259.10 yesterday, as raw-material producers retreated amid speculation the U.S. Federal Reserve’s efforts to shore up the economy will be gradual. That was the steepest decline for the measure since May 25 and pared its rebound from this year’s May 25 low to 24 percent.

“Halloween is a time for good scares, and candy,” Hao Hong, a Beijing-based global strategist at CICC, said in a report. “This sell-off is more likely to be a correction than a ceiling.”

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- Posted: 2010-10-27 22:11:32

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