Chinese stock markets continue to have negative sentiments despite China’s attempts at stabilizing its markets. Since the summer stock rout, China had banned unloading of shares by large stakeholders. According to analysts, this ban, originally expected to expire Friday, could remain in place for some time. Expectations that regulators will ramp up intervention could mean that, in the near term, Chinese markets will remain “volatile on a daily basis,” said David Millhouse, head of China research at Forsyth Barr Asia.
Since china is the second largest Crude oil consumer in the world, the crisis has strengthened the US Dollar and weakened the crude oil. Also, oil prices hit 11-year low, around 2% decrease. Conflicts between Saudi Arabia and Iran persists and chances of co-operation to cut production owing to a global over-supply seems unlikely.
To add to this, North Korea has announced that it has successfully tested hydrogen bomb. The move adds to the U.S.’s foreign-policy challenges and further complicates China’s relationship with the U.S. This is said to have unnerved the investors and has led to negative sentiments in the Asian markets. Analysts believe that like Asian markets, U.S. stocks too might get negatively impacted by Korea’s hydrogen Bomb detonation.
A Bank of Korea official said that while this move is not good for the market, considering previous cases it may not have a sustained influence on the market.
We may see a negative spike in the sentiments for $BNO and $UNG.
$BNO – United States Brent Oil – Bearish (Short term)
$UNG – United States Natural Gas – Bearish (Short term)
Also, since the news is beneficial to Auto industry, and with $F December 2015 Sales up to the mark, we may see a positive spike in $F soon!
According to analysts, though in the near-short term, oil prices are expected to fall, it may be bullish in the long run.
$MBLY – Mobileye – Bullish (Short – Medium term)
In addition to its partnership with GM, Mobileye just made a Huge deal with VW. The company signed a Memorandum of Understanding with Volkswagen and announced a strategic partnership to explore and integrate REM into Volkswagen’s fleet. Analysts believe that additional OEM’s will benefit from Mobileye’s REM technology. This might as well be the right time to consider buying $MBLY, which fell more than 10% to as low as $35.63 just yesterday.