Post-plenum trading may see stocks rising

Wang Tao, chief economist for China with UBS AG, wrote in a research note that nominal growth and credit impulse matter.

"Nominal GDP growth (which investors arguably care more about as it is more informative for corporate revenue and profits) also eased in the third quarter, by 0.3 percentage point, to 6.2 percent year-on-year.

"On a more positive note, credit growth picked up to 14.3 percent year-on-year in September, thanks to looser lending restrictions and liquidity conditions. Investment-related credit growth finally picked up in September, which should help underpin the infrastructure investment pickup we see in the coming months," wrote Wang.

Market observers said China's equity markets have seen continued net capital inflows over the past weeks, showing that new investors are entering the market.

Data from the China Securities Depository and Clearing Co Ltd showed that the number of new investors in the A-share market increased by 333,000 in the week from October 19 to 23, compared with 300,000 in the week before.

In the first two weeks of October, there were less than 240,000 new investors.

However, turnover rate and trading volumes have not been picking up.

Selling pressure remains, and institutional investors have been relatively quiet in recent weeks, awaiting more evidence of recovery and return of stability.

The beginning of November may be a time to offer a clear picture, said a research note from Minsheng Securities Co Ltd.