Shanghai Composite: gap down open short-lived, turns positive as regulators talk up stocks
|- Shanghai Composite (SSE) dropped 1 percent at the open but quickly turned higher on a coordinated show of assurance fro regulators.
- The momentum studies - 5-,10-, and 21-day EMAs - are still trending south, indicating a bearish setup.
Chinese stocks are flashing green at press time on the back of coordinated assurance from regulators.
The Shanghai Composite is currently trading at 2500, having gapped lower at 2460 earlier today.
Liu Shiyu, Chairman of the China Securities Regulatory Commission (CSRC) said it will encourage funds to help resolve liquidity difficulties at listed companies caused by stock pledging and will speed up approval for mergers and acquisitions as part of efforts to boost market confidence, according to Reuters.
Meanwhile, the head of China's banking and insurance regulator said that insurers will be encouraged to invest in listed firms and allowed to set up products to address liquidity issues related to listed firms' stock pledging.
These assuring comments seem to have calmed market nerves, although the technical bias still remains bearish as indicated by the downward sloping 5-, 10-, and 21-day exponential moving averages (EMAs).
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