FX.co ★ Rally May Stall For China Stock Market

The Chinese stock market has enjoyed consecutive gains over the past two sessions, accumulating nearly 35 points or a 1.2% increase. Currently, the Shanghai Composite Index stands just above 3,150 points but may encounter resistance on Monday.

Globally, the outlook for Asian markets is uncertain, with expectations of profit-taking that could limit any upward movement. European markets ended on a softer note, while U.S. markets were mixed and largely unchanged, suggesting that Asian markets may experience a similar mixed performance.

On Friday, the Shanghai Composite Index saw significant advances driven by substantial gains in the property sector, along with moderate increases in financial shares and resource stocks. The index rose by 31.63 points, or 1.01%, to close at a daily high of 3,154.03, after dipping to a low of 3,116.78. The Shenzhen Composite Index also improved, climbing 20.88 points or 1.18% to finish at 1,785.59.

Key performers included Industrial and Commercial Bank of China, which increased by 1.11%; Bank of China, up 0.45%; and China Merchants Bank, which surged by 1.66%. Conversely, China Construction Bank fell by 0.42%. Other notable movers were China Life Insurance, which jumped 1.85%; Jiangxi Copper, up 1.60%; Aluminum Corporation of China (Chalco), rising 1.57%; and PetroChina, advancing 0.92%. Among the detractors, Huaneng Power dropped 1.34%, while several leading developers including Gemdale, Poly Developments, and China Vanke hit the 10% daily limit surge.

Wall Street painted a mixed picture, with major indices opening flat and closing in a similar fashion. The Dow Jones Industrial Average advanced 134.19 points, or 0.34%, to reach a record 40,003.59. The NASDAQ Composite dipped 12.33 points, or 0.07%, to 16,685.97, and the S&P 500 edged up 6.17 points, or 0.12%, to 5,303.27.

Throughout the week, the NASDAQ surged 2.1%, the S&P 500 climbed 1.5%, and the Dow gained 1.2%. The hesitant trading on Wall Street reflected traders' reluctance to make significant moves as they assessed the recent market strength and record-high levels of major averages.

In economic news, the Conference Board reported a continued decline in its leading U.S. economic indicators for April.

Oil prices rose on Friday amid signals of easing inflation, lower inventories, and potential interest rate cuts. West Texas Intermediate (WTI) crude oil futures for June increased to $80.06 a barrel, up $0.79 or slightly over 1%. WTI crude futures posted a 2.3% gain for the week.