By Zheng Buchun

A-shares closed slightly lower yesterday with Shanghai Composite down 0.21% and Shenzhen Composite down 0.02%. Trading volumes on both market increased compared with the previous day. Overall, gold stocks outperformed others. But newly listed stocks and stocks of growth enterprises lost their strength.

In general, well-performing stocks are many, but only gold stocks have potential to grow substantially.

International gold prices are rising to hedge against doubts over Trump's agenda and European politics, especially the upcoming French presidential election. Rising inflation expectations and stricter foreign exchange control in China all helped drive up gold prices and prices of gold stocks.

The central bank of China starts to drain liquidity from the market again. It's the third day since China stopped to conduct reverse repos, which is a significant factor for a slowing market.

Statistics show that China's foreign-exchange reserves of January fell to 2.9982 trillion US dollars, which is slightly lower than expected. But it is much better than that of previous months. That means market regulations taken by the central bank worked.

Due to so many uncertainties ahead, investors should be precautions against fake financial statements in the reporting season. And, remember not to overweight your portfolio.

(Zheng Buchun is NBD's columnist)

Email: tanyuhan@nbd.com.cn