Chinese stock markets outlook october 8 2012

Chinese stock markets outlook october 8 2012 : Chinese stock markets ended with gains on September 28, the last trading day before the eight-day holiday, as the heavily weighted non-ferrous metal, brewing, environmental protection, real estate and securities sectors outperformed in what was a broadly positive day for mainland equities.

The Shanghai Composite Index finished trading at 2,086.17 points on September 28, up 29.85 points, or 1.45 percent on the day; while the Shenzhen Component Index closed at 8,679.22 points after climbing 192.94 points, or 2.27 percent on the day.

Both markets began the last week of September with modest advances after the provincial government of Sichuan unveiled a multi-trillion yuan round of development projects. Tuesday witnessed the markets close with losses as gold, non-ferrous metal, gas heating, Internet and media stocks declined. The slide extended into Wednesday, when the Shanghai Composite bottomed out at an inter-day low below the 2,000 point mark and closed at a 43-month low. The situation improved Thursday as investor confidence picked up after the People's Bank of China (PBC) injected a record dose of cash into the country's money market to ease short-term liquidity stresses.

Chinese retailer Suning Appliance surged 9.29 percent to 6.94 yuan ($1.10) on September 28 after the company announced it would acquire Redbaby.com.cn, an online retailer of infant and maternal products, for $66 million.

Mainland stocks registered a net capital inflow of 2.47 billion yuan during the last week of September. The securities, banking, engineering construction, coal and brewing sectors received the most capital; while the non-ferrous metal, medicine, computer and education sectors experienced the biggest outflows.

With mainland bourses set to reopen Monday, some analysts are optimistic that shares will climb higher after the holiday break.

"Investors are speculating that some key favorable policies [in China] will be rolled out after the National Day holiday, since the time of the 18th National Congress of the Communist Party has been settled," according to a report Friday by the South China Morning Post, citing Patrick Yiu, the managing director at CASH Asset Management.

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