CHN50 still in downtrend despite state fund’s vow to boost stock purchases
FXCM's China 50 basket gapped up on news that a state fund will boost stock purchases. China's Central Huijin Investment, a sovereign fund that owns China's state-run banks and other government enterprises, said it will step-up its purchases of stock index funds to support the market. The fund tends to buy big state banks and companies to counter the selling pressure in the Chinese market, largely due to China's property crisis and slowing economy.
However, it is uncertain if Beijing's latest efforts will stop the rout in the Chinese stock market. Despite the positive price action for February, CHN50 is still in a primary downtrend, with its green 5-month EMA below its orange 10-month EMA and its monthly RSI firmly on the bearish side of 50.
Source: www.tradingview.com
Despite being one of the most affordable globally, the Chinese stock market has not attracted enthusiastic investors. To regain their trust, authorities must go beyond prohibiting short selling, cautioning against "negative market tactics," and restricting the application of algorithmic and automatic trading. In effect, the fundamentals on the ground need to improve.
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.