China continued its five-day upward track. Major Chinese indices closed up as much as 3% yesterday. So far in the last week, the China A50 has chalked up an almost 10% gain and is testing key resistance here. Although it has broken the 11,140 early March high, it needs to build a base here before it is able to stage a fresh assault of the January high of around 12,000. Premier Li Ke Qiang weekend’s press conference could have provided the spark for the strong move in Chinese stocks yesterday. He reiterated that the 7% growth target is a realistic figure, albeit one that the Chinese will have to work hard to earn. Furthermore, he reinforced the government’s commitment to making the target, citing their flexibility in policies and the many options that they have to help the economy power on.

Fed Watch

Over at Fed Watch, the debate has been brewing over a word. The word is ‘patient’ and the debate, as to whether it will be removed from the usual rhetoric the Fed is expected to offer this week. Stocks in the US and Europe had a banner day to kick off the new week with the Dax breaking through 12,000 to a new all-time high and the Dow posting a 200-plus point gain on the day. Some pointed to the lower-than-expected US Industrial Production Numbers that may have led to the short covering in stocks.

Crude

Crude had another dreadful session overnight with January lows tested. While the reason for the sell down last night can again be pointed to supply-side worries, the capitulation of the last four days could also be due to trades being systematically stopped out after US$49 was breeched. That said, this current low of around US$43.5 is now a critical support.

Singapore Equities

‘Oil’ plays continue to lead trading themes this week. On the positive side, transportation and logistics names like SIA, Tiger Air, Comfort Delgro, SMRT, NOL and Singpost could see buyers; while Keppel Corp, Sembawang Marine, Ezion and Ezra may remain under pressure.
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