Near the end of December, Evelyn Cheng of CNBC reported that Chinese stocks may show instability at the start of 2019. This comes after the Shanghai composite shows a 20% decline in 2018. The Shenzhen index also exhibited a poor performance with around a 30% drop in the last year. This means that Chinese investments suffered significant losses compared with other indexes, such as the S&P 500 (with a 6% fall), the Japanese Nikkei 225 (above 9% loss), and Germany’s DAX (166% decline).
This occurred after Bloomberg announced analyst’s predictions that a dip in Chinese stock prices will occur back in August 2018.
With this decline in investments, Jim Cramer of CNBC reports that some of China’s stocks open up a window of opportunity for investors, according to a top chart analyst. Cramer and colleague Dan Fitzpatrick say that these investments have reached their lowest point, which means that it is ready to take off one more. In this regard, Cramer and Fitzpatrick recommend buying shares from some Chinese companies.
What’s Next for China’s Stock Market
In view of the strains between the U.S. and China trade relations, coupled with the policies set by Beijing, Cheng forecasts that the first few months of the new year will shed light on these matters. The world awaits announcements from China’s National People’s Congress regarding trade policies. This is expected to come in March 2019. Meanwhile, Chinese stocks may regain its status around 6 months into 2019, according to experts.
Moreover, Investing Heaven says that the Shanghai Stock Exchange is currently at a major support area, according to charts. In their market outlook, they projected the stocks to experience a 73% growth as compared to its present performance. However, it must first reach 2800 points in the index. If left unfulfilled, the stocks will be more open for a decline.
These developments regarding Chinese stocks can be unpredictable especially in the tense relationship of the US and China, as well as China’s announcement that this economy has slowed down its pace as compared to its past performances.