FX.co ★ China Stock Market May Again Test Resistance At 3,000 Points

The Chinese stock market has seen an upward trend for three consecutive sessions, advancing nearly 35 points or 1.1% during this period. The Shanghai Composite Index currently hovers just below the 2,975-point mark, with the potential for further gains on Tuesday. Positive sentiment regarding interest rates sets an optimistic tone for the Asian markets, following mixed performances in Europe and gains in the United States.

On Monday, the Shanghai Composite Index edged up marginally as financial and resource sectors posted gains, which were somewhat offset by declines in the property sector. Specifically, the index added 2.72 points, or 0.09%, to close at 2,974.01, after fluctuating between 2,959.13 and 2,977.31. In terms of individual stocks, Industrial and Commercial Bank of China rose by 1.97%, Agricultural Bank of China increased by 2.61%, China Construction Bank surged by 2.99%, and Bank of Communications climbed 1.08%. In the resource sector, Jiangxi Copper advanced 0.84%, Aluminum Corp of China (Chalco) appreciated by 1.64%, and Yankuang Energy saw a remarkable rise of 5.95%. PetroChina was up 1.36% and China Petroleum and Chemical (Sinopec) gained 2.34%. Conversely, China Merchants Bank dropped 0.65%, Gemdale plummeted 3.03%, Poly Developments dipped 0.22%, and China Vanke declined by 1.73%.

Wall Street provided a positive lead, with major indices opening higher on Monday and maintaining those levels throughout the session, resulting in new record closing highs despite some volatility. The Dow Jones Industrial Average rallied by 210.82 points, or 0.53%, to close at 40,211.72. The NASDAQ Composite Index gained 74.12 points, or 0.40%, finishing at 18,472.57, and the S&P 500 rose by 15.87 points, or 0.28%, to end at 5,631.22.

The buoyancy in U.S. markets was largely attributed to comments from Federal Reserve Chair Jerome Powell, who indicated that the central bank wouldn't wait for inflation to reach 2% before cutting interest rates.

On the economic front, a report from the Federal Reserve Bank of New York revealed that regional manufacturing activity in July contracted at a slightly accelerated pace.

In the commodities market, crude oil futures experienced a decline on Monday, influenced by political uncertainty following an assassination attempt on former President Donald Trump, and weak economic data out of China. West Texas Intermediate crude oil futures for August settled at $81.91 per barrel, down $0.30.