Reuters reported that China's largest shipping conglomerate China Cosco surged more than 16% after the global freight index broke its three week losing streak to gain more than 1% overnight.

According to the report, the Baltic Dry Index, which gauges changes in the prices of shipping commodities, rose for the first time since November 18th recently amid rising steel prices and firm iron ore prices.

Mr Johnson Man Leung analyst with JPMorgan said “We maintain our call on the stock and sector because we do not believe there is a change to the likelihood that the sector will see 4 years of down cycle with freight rates holding just around operating costs.”

He said that “But for trading, we would short cover in the interim and wait for the market liquidity push to settle and then short or exit. We just do not trade against the market when the stock indices, freight indices and steel prices are moving in the same direction.’