By Zheng Buchun

China shocked the financial market by raising short-term interest rates on the first trading day back from a long holiday, which is predominant for the fall of A-shares on last Friday. Share indexes, bonds, and futures also plunged.

Domestically, housing market cools down and PMI index keeps stable. Internationally, Trump's policies, UK parliament's vote for Brexit process, and Fed's potential interest hikes, all, had great influences on the A-share market.

China has already battled to stabilize RMB exchange rate before the Spring Festival and I think it will continue to do so because of Trump's policies. For sure, the central bank has done a great job. Short-term interest rate hike helps shore up the yuan. However, it is bad news for the A-share market. In the foreseeable future, A-shares are unlikely to show big rebounds.

Investors should be ready for a down market. But the IPO market may slow down for seasonal factors (companies to issue IPOs have to present all fiscal reports in 2016). So be patient and adjust your positions after they rebound.

(Zheng Buchun is NBD's columnist)

Email: tanyuhan@nbd.com.cn