Profits of major Chinese corporations increased significantly in June, which contributed to strong growth of Chinese indexes in the first trading session of the week. So, the statistics published on Sunday showed that the profit for the year of major Chinese corporations increased by 17.9%, the same rate in May was 8.9%. Analysts point out that such a result was possible due to the low base of comparison of the previous year and the intensification of government programs.
Despite the positive data on production and sales growth, analysts note rising inventories of companies and reduced efficiency, which may adversely affect the growth of the overall economy. We expect that the stock markets at the moment are overvalued and expect a significant correction by 10-15% in the medium term. Opening long positions on futures on Chinese stocks at the moment is risky and we recommend buying them after correction.