China Automaker, Defense Stocks May Get a Boost
China stocks may stabilize on Thursday after sharp losses a day earlier, with automaker and defense stocks in focus.
Analysts expect strong support at 2400 level for the benchmark Shanghai Composite Index, which slid 1.65 percent on Wednesday to end at 2408.59.
Wednesday's selloff hit property and resources stocks the hardest, while defense stocks bucked the downtrend on China-Philippines tension over the disputed Huangyan Island (Scarborough Shoal) territory.
1) Silver futures to start trading on the Shanghai Futures Exchange, the first new futures product to be launched this year.
2) Securities regulators announce new rules to promote more dividend payout by listed companies, and may disclose names of companies with low dividend payout histories.
3) Fuel price cut comes as expected (for motorists, petrol per liter will be around 0.25 yuan cheaper); it may have slight impact on refiners and transport stocks.
Stocks to Watch:
Bank of Communications - Bank of Communications shareholders approve the bank's plans to raise CNY56.6 billion ($9 billion) via a private placement.
Defense Stocks - Shipbuilders and plane makers may see continued trading interest as China-Philippines tensions over disputed territory escalate. Analysts say China may use the dispute to redirect attention from domestic political scandals and boost nationalistic sentiment.
Auto Stocks - Automakers may benefit from data showing China's April auto sales rose 5.19 percent year-over-year, after auto sales slipped 3.4 percent in the first quarter.