Stock Market in China Might Receive Boost on Monday
Shanghai Composite Index (SCI) Set for Potential Rebound Amid Trade Optimism
The Shanghai Composite Index (SCI) is expected to show a positive movement on Monday following its Friday decline, as indicated by recent trends and forecasts. After dropping on Friday, the index gained 0.5% on Tuesday, reaching 3,628.53, suggesting a rebound.
Moreover, forecasts for August indicate an upward average value of around 3,496 with a rise toward 3,520 by the month’s end, consistent with a general positive outlook for the index in the near term.
The optimistic sentiment in the region is partly due to the ratified U.S.-EU trade agreement. This deal is contributing to a reduction in global trade conflict concerns and encouraging a risk-on mood among investors, which tends to lift Asian equities, including those in China and Hong Kong.
The U.S. deal with Japan and scheduled talks with China, alongside the U.S.-EU trade agreement, are supporting a more robust performance for indices like the SCI.
However, crude oil fell on Friday due to reports that the U.S. might allow partners of Venezuela's state-run PDVSA to resume operations, sparking concerns of over-supply. It's unclear how this development will impact the SCI in the long term.
Elsewhere in the Chinese stock market, the Shenzhen Composite Index dipped 0.10 percent on Friday, and several major companies such as Aluminum Corp of China (Chalco), Bank of China, Yankuang Energy, Industrial and Commercial Bank of China, Agricultural Bank of China, and Jiangxi Copper all experienced variations in their stock prices.
On Friday, the SCI lost 12.07 points or 0.33 percent, ending a six-day winning streak. The index is currently just beneath the 3,600-point plateau.
In other news, China will release June figures for industrial profits later this morning, which may provide additional insight into the health of the Chinese economy.
In summary:
- The Shanghai Composite Index (SCI) is expected to rebound on Monday following its Friday decline.
- The general August forecast for the SCI is moderately bullish with increases toward mid-to-late August.
- The ratified U.S.-EU trade agreement is boosting investor confidence, reducing trade tensions, and supporting gains in Asian equities, including Shanghai markets.
- Crude oil fell on Friday due to reports of potential over-supply from Venezuela's state-run PDVSA.
- The Shenzhen Composite Index dipped 0.10 percent on Friday, and several major companies experienced variations in their stock prices.
- China will release June figures for industrial profits later this morning.
- The anticipated rebound for the Shanghai Composite Index (SCI) on Monday could be influenced by investing in the stock-market, given the general optimistic sentiment in the region due to the ratified U.S.-EU trade agreement.
- As August progresses, the finance sector may witness an upward trend in the SCI, potentially reaching the average value of 3,496, with a rise toward 3,520 by the month’s end, due to a positive outlook driven by trade optimism.
