Market Review: Positive Sentiment Drives Broad Gains
Yesterday’s Politburo meeting highlighted key terms like “moderately loose” monetary policy and “extraordinary” countercyclical adjustments, terms rarely used in recent years. The mention of “moderately loose” for the first time in 13 years has fueled market expectations of increased government investment and stronger consumer subsidies. This sparked a broad rally across the commodity markets.

Key Takeaways from the Policy Discussion

  1. Easing Monetary Policy: Signals of future easing hint at potential measures such as interest rate cuts, higher deficit ratios, or additional bond issuance.
  2. Government Investment Boost: Enhanced infrastructure spending and subsidies are likely to support demand.
  3. Near-Term Impact: The rally is based on optimistic expectations, with more concrete measures yet to be announced.

Market Outlook and Trading Strategy

  • Upside Potential: Current estimates suggest a rise of 100–150 points, capped below the 3500 level.
  • Short-Term Strategy: Favor light intraday long positions, leveraging the current optimism with controlled risk.
  • Long-Term Perspective: The broader market trend has not yet reversed; stay cautious about overextending positions.

With optimism driving short-term gains, staying agile and informed will be crucial to capitalize on opportunities while mitigating risks.

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