After a long break for the National Day holiday, China’s stock market snapped a two-day winning streak in which it had risen almost 10 points, or 0.3 per cent. The Shanghai Composite Index is now hovering just below the 3,100 level, although it may rise again on Tuesday.
The global outlook for Asian markets is cautiously optimistic, with geopolitical concerns outweighing optimism over the outlook for interest rates. European markets were lower, US markets were higher and Asian markets are likely to follow suit.
The SCI closed slightly lower on Monday as losses in financials and property were mitigated by support from materials companies.
For the day, the index shed 13.55 points or 0.44 per cent to close at 3,096.92 after trading between 3,072.64 and 3,103.36. The Shenzhen Composite Index lost 1.64 points or 0.09 per cent to close at 1,908.64.
Among active stocks, Industrial and Commercial Bank of China fell 0.21 per cent, while Bank of China shed 0.27 per cent, China Construction Bank slid 0.16 per cent, China Merchants Bank slid 1.18 per cent, Bank of Communications rose 0.17 per cent, China Life Insurance lost 0.47 per cent, Jiangxi Copper fell 2.13 per cent, Aluminum Corp of China (Chalco) added 0. 48 percent, Yankuang Energy gained 2.72 percent, PetroChina fell 0.88 percent, China Petroleum and Chemical (Sinopec) eased 0.16 percent, China Shenhua Energy climbed 1.12 percent, Gemdale plunged 3.23 percent, Poly Developments retreated 1.33 percent, China Vanke slumped 1.45 percent and Huaneng Power was unchanged.
The lead from Wall Street is positive as the major averages shook off early weakness on Monday to cross the unchanged line at midday and close firmly in the green.
The Dow jumped 197.07 points, or 0.59 per cent, to close at 33,604.65, while the NASDAQ climbed 52.90 points, or 0.39 per cent, to close at 13,484.24 and the SP 500 added 27.16 points, or 0.63 per cent, to close at 4,335.66.
The early weakness on Wall Street was the result of the violent clashes between Israel and Hamas that began over the weekend.
However, sentiment turned positive as concerns about interest rates eased after Federal Reserve Vice Chairman Philip Jefferson said the central bank needed to “proceed cautiously to balance the risk of tightening too much”.
However, the overall mood was cautious as investors await inflation data later in the week. It could have a significant impact on the outlook for interest rates, amid recent concerns that the Federal Reserve will keep rates at elevated levels for longer than previously expected.
Oil prices rose sharply on Monday amid concerns that rising tensions in the Middle East could disrupt global oil supplies. West Texas Intermediate crude oil futures for November delivery rose $3.59, or 4.3 per cent, to $86.38 a barrel.
