Written by Sebastian Wanke | 01 June 2015
Posted in Special research

At high speed the sentix Strategic Bias currently falls for Chinese mainland stocks. The indicator stands for investors’ basic conviction for a market. Its sharp decline signals that a substantial readiness to sell has now emerged for Chinese equities.

 With the strong correction of the Chinese leading index CSI 300 last Thursday not only (short-term oriented) investors’ sentiment has fallen markedly. Also, market participants’ medium-term perspectives for Chinese shares deteriorate sig-nificantly. This is what the sentix Strategic Bias for the CSI 300 shows which was polled via the latest sentix Global Investor Survey. Statistical analyses prove that this indicator points in a highly reliable manner to the basic direction of a market. As it recedes strongly this week, it now signals a heightened readiness to sell among investors.

The overall picture for China stocks thus gets cloudy from a sentiment point of view. What sticks out positively is that investors now should definitely have got a sense for the extreme developments at the Chinese equity market. And the chart-technical side remains – despite the high volatility – constructive for the CSI 300. Below 4,800 points this assessment would change, though, and the observable high readiness to sell would then probably take its toll.

Background

The sentix Strategic Bias (which is surveyed since the beginning of 2001) reflects investors’ 6-month expectations and thus their strategic view and basic conviction for a market. Because of this characteristic it serves as a directional indicator which usually leads the corresponding market’s development.

The current sentix Global Investor Survey was conducted from May 28th to May 30th, 2015. 1,001 individual and institutional investors took part in it.