Chinese stock market is enjoying one of the best years so far. It is turning out to be year of the bull not goat for stock market. CSI rallied to new 7 year high to 3786. The index is up more than 2.5% today.

  • Central bank’s favorable comments over possibilities of further policy easing might have fueled today’s aggressive movement. The stock index is rallying since March 8 and has closed in negative only one day since then.
  • According some analyst, the market is still cheaper as it is trading at forward PE of 15, compared to a 10 year average of 17.5.

CSI 300 has gained just about 17% so far this year and more than 85% in last 1 year. However foreign investors have been pulling out billions of dollar out of Chinese stock markets for quite some time now.

  • Buying frenzy has hit all segments of the market. As shown in the chart Chinese property stocks. Property market has been in trouble for quite some time now. Investors seem to be paying no heed over that so far, when it comes to stocks.
  • Shenzhen composite index is up more than 37% this year.

Today, Peoples Bank of China (PBOC) eases mortgage policy, lowered second home down payment to 40%.

  • Chart shows, housing stocks reached a six year high today, further rise is expected as PBOC eased mortgage policy.

Chinese stocks might get further boost from easing by Central bank, however investors should remain cautious over this aggressive speculation.

The material has been provided by InstaForex Company –