Bloomberg News

China Stocks Rally Yesterday Was ‘Key Reversal,’ CICC Says

October 12, 2011

Oct. 13 (Bloomberg) -- The biggest rally for Chinese stocks yesterday in a year was a “key reversal,” with equities overcoming “bad news” such as U.S. legislation on the yuan and property curbs, according to China International Capital Corp.

“Simultaneous capitulation” in both onshore and offshore Chinese markets is a positive signal that wasn’t even seen in March 2008, Hao Hong, a Beijing-based global equity strategist at CICC, said in a report to clients. “Our adjusted view is that the sufficient and necessary conditions for a counter-trend rally are in place, namely, capitulation and cheap valuation,” he said.

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