Stock Market in China Could Possibly Continue Its Winning Run
Asian Markets Show Mixed Performance Amid Global Uncertainties
The outlook for Asian markets remains cautiously optimistic, with a mix of positive and negative influences shaping the current investment landscape. The Shanghai Composite Index (SCI) has recently reached a ten-year high, signaling strong performance, supported by broad-based rallies in leading stocks [5]. The Shenzhen Composite Index is also performing well, reflecting positive momentum across Chinese markets.
On Tuesday, the SCI added 18.37 points or 0.50 percent to finish at 3,665.92, with China Petroleum and Chemical (Sinopec) strengthening 1.41 percent. Meanwhile, the China stock market has moved higher in two consecutive sessions, collecting more than 30 points or 0.9 percent [6]. The Shenzhen Composite Index rose 7.40 points or 0.33 percent to end at 2,259.12 [7].
The optimistic sentiment in Asian markets is partially driven by anticipation of a U.S. Federal Reserve rate cut in September. This expectation is lifting sentiment across various exchanges, albeit with caution due to ongoing inflation concerns and geopolitical factors [1][3]. The Labor Department's consumer price inflation report for July was in line with expectations, but faster than expected annual core price growth in the report has increased the chances of the Federal Reserve lowering interest rates next month [10]. According to CME Group's FedWatch Tool, there is a 94.4 percent chance of the Fed cutting rates by a quarter point in September [8].
However, not all sectors are performing equally well. West Texas Intermediate crude for September delivery was down $0.88 or 1.38 percent at $63.08 per barrel on Tuesday, due to anticipation of an upcoming meeting between the U.S. and Russian presidents [9].
Regarding notable active stocks, Chinese large caps such as Alibaba, Tencent, and Xiaomi saw strong gains due to inflows and sector momentum [2]. In Hong Kong and China, sectors like communication services, consumer cyclical, and technology outperformed. In Singapore, PropNex surged 52% on strong earnings, exemplifying robust company-level performance [4]. Japan's Asics contributed significantly to Nikkei gains with an 18% share price rise driven by strong earnings [2].
Despite the overall positive performance, market participants remain cautious, particularly on tech stocks given mixed signals around AI enthusiasm and global economic uncertainties [3][5]. Stocks like Bank of China, China Merchants Bank, and Agricultural Bank of China also showed mixed results, with Bank of China collecting 0.71 percent and China Merchants Bank falling 0.23 percent, while Agricultural Bank of China jumped 1.63 percent [6][7]. PetroChina spiked 2.10 percent [6].
In conclusion, the Shanghai and Shenzhen indices have exhibited solid gains recently, with the Shanghai Composite hitting decade highs, underpinned by large-cap rallies and supportive macro factors like expected Fed easing and ongoing trade optimism between the U.S. and China. However, market participants remain cautious, particularly on tech stocks given mixed signals around AI enthusiasm and global economic uncertainties.
Read also:
- Supporting urban advancement
- Indonesia's fresh 10-year power acquisition scheme signals a positive shift towards reinforcing renewable energy: as perceived by investors and the JETP office.
- Agencies' Overseas Medical Education Strategies
- Exemptions from parliamentary approval sought for EU initiatives, sports activities, and academic programs.
