The Chinese stock market is experiencing negative dynamics. Investors were disappointed by the data on the volume of foreign direct investment in China in April. Thus, last month in China's economy was invested 8.7 billion U.S. dollars, which is 3.4% more than a year ago, but less than 12.24 billion in March.
An additional negative factor is that Chinese banks recorded the largest quarterly increase in problem credits since 2005. Today's data showed that toxic loans increased by 54 billion yuan (8.7 billion dollars) within three months till March and reached 646.1 billion yuan, the highest level since September 2008. Bad loans totaled 1.04 percent of all loans, compared with 1 percent three months earlier.
At the moment, the Chinese industry reduces the growth rate, and the construction sector is at risk of default. In this regard, we maintain a long-term negative outlook for Chinese stock market.
Wish you the profits!
FXFINPRO Capital Analytical department.