Dragon Rises from the Ashes: Gold Construction Stocks Roar Back to Life After Tsunami-Induced Slump
- Two days after the market downturn, construction stocks rebounded today, with the opening index rising 1.56%.
- Construction stocks bucked the trend today, once the opening index rose 1.56%.
- Under the central bank's firm policy to crack down on real estate speculation, construction stocks fell 7% last Friday.
Construction Stocks Rebound After Two-Day Decline
Two days after the market downturn, construction stocks rebounded today, with the opening index rising 1.56%. This surge was mainly due to the market’s technical rebound after a short-term correction, according to Cai Minhan, an analyst at Cathay Securities Futures Consulting Office.
Construction stocks bucked the trend today, once the opening index rose 1.56%. Schematic diagram/provided by Yongking Real Estate Group
Under the central bank’s firm policy to crack down on real estate speculation, construction stocks fell 7% last Friday. However, companies that focus on public projects such as technology factories, commercial offices, industrial parks, urban renewal, and dilapidated old buildings support the trend and support the market. At the close of the listed counter construction group, 13 stocks were flat and above and 6 stocks fell below the range.
Construction stocks rose slightly after opening today to 572.71 yuan, and then hit the highest price of 581.27 yuan, which was a strong performance, only shipping stocks. Although the stock price fell later, it still stood at 575.67 yuan, up 0.58% from yesterday’s closing price of 572.35 yuan.
Analyst Cai Minhan said construction stocks’ performance today was largely due to the market’s technical rebound after reacting to a short-term correction. The retracement in construction stocks over the past two days has led some investors to believe that stock prices have fallen too far, so a short-term rebound has occurred and the pace of the correction appears to be faster than expected.
Cai Minhan noted that in the past few years, due to the government’s housing crackdown policy, the performance of construction stock has lagged behind, but there has been compensatory growth as the housing market warms up. However, with the release of a new round of policies, the stock has experienced a period of price adjustment. He believes that in the short term, the market has strong expectations to suppress the housing market so, even if the construction stock rebounds, it may only be a short-term phenomenon and long-term rebound momentum is limited.