The China stock market has finished lower in two straight sessions, falling more than 90 points or 2.7 percent in that span. The Shanghai Composite Index now sits just above the 3,480-point plateau and it’s tipped to open in the red again on Monday.
The global forecast for the Asian markets suggests further volatility thanks to ongoing short-selling issues. The Asian markets have a solidly negative lead from Europe and the U.S. – and they may open that way, but bargain hunters may emerge later in the day to boost the oversold bourses.
The SCI finished modestly lower on Friday following losses from the resource stocks, energy producers and properties – while the financials came in mixed.
For the day, the index fell 22.11 points or 0.63 percent to finish at 3,483.07 after trading between 3,446.55 and 3,531.60. The Shenzhen Composite Index slipped 17.71 points or 0.75 percent to end at 2,335.05.
Among the actives, Industrial and Commercial Bank of China climbed 1.19 percent, China Construction Bank jumped 1.50 percent, China Merchants Bank dropped 0.99 percent, Bank of Communications fell 0.22 percent, China Life Insurance tanked 2.93 percent, Jiangxi Copper retreated 2.84 percent, Aluminum Corp of China (Chalco) skidded 1.23 percent, Yanzhou Coal plunged 3.01 percent, PetroChina lost 0.97 percent, China Petroleum and Chemical (Sinopec) sank 0.75 percent, Anhui Cement and Huaneng Power both shed 0.71 percent, China Shenhua Energy surrendered 2.03 percent, Gemdale plummeted 3.04 percent, Poly Developments declined 1.71 percent, China Vanke tumbled 2.25 percent and Bank of China and China Fortune Land were unchanged.
The lead from Wall Street is broadly negative as the major averages opened solidly in the red on Friday and saw the losses accelerate as the session progressed – offsetting gains from the previous day.
The Dow plummeted 620.78 points or 2.03 percent to finish at 29,982.62, while the NASDAQ tumbled 266.46 points or 2.00 percent to end at 13,070.69 and the S&P 500 lost 73.14 points or 1.93 percent to close at 2,714.24. For the week, the Dow, NASDAQ and S&P all fell 3.5 percent.
The sell-off on Wall Street reflected concerns about recent market volatility of heavily shorted stocks like GameStop (GME) and AMC Entertainment (AMC) – which moved sharply higher after Robinhood eased restrictions on certain stocks that have recently skyrocketed.
The spikes by the heavily shorted stocks have been described as a retail investor revolt, raising concerns that hedge funds may have to sell other securities to make up for their losses.
In economic news, the Commerce Department noted a much bigger than expected increase in personal income in December, along with a modest decrease in personal spending. Also, the University of Michigan said consumer sentiment deteriorated more than expected in January.
Crude oil futures settled lower Friday as worries about the outlook for energy demand due to rising coronavirus cases and delays in vaccine supplies weighed on prices. West Texas Intermediate Crude oil futures for March ended down $0.14 or 0.3 percent at $52.20 a barrel.
Market Analysis
More Pain Predicted For China Stock Market
2021-02-01 00:30:12
