China Stock Market Called Rangebound On Monday

The China stock market has finished lower in two of three trading days since the end of the four-day winning streak in which it had gathered almost 85 points or 2.6 percent. The Shanghai Composite Index now rests just above the 3,275-point plateau although it’s likely to rebound again on Monday.

The global forecast for the Asian markets is upbeat on optimism for economic growth and easing inflation. The European and U.S. markets were firmly higher on Friday and the Asian bourses are tipped to open in similar fashion.

The SCI finished slightly lower on Friday as support from the financials, properties and energy producers held losses from the broader market at bay.

For the day, the index dipped 4.78 points or 0.15 percent to finish at 3,276.89 after trading between 3,272.84 and 3,288.22. The Shenzhen Composite Index shed 9.92 points or 0.45 percent to end at 2,207.06.

Among the actives, Bank of China fell 0.33 percent, while China Construction Bank collected 0.36 percent, China Merchants Bank was up 0.03 percent, China Life Insurance jumped 1.60 percent, Jiangxi Copper rose 0.29 percent, Aluminum Corp of China (Chalco) strengthened 1.53 percent, Yankuang Energy soared 3.39 percent, PetroChina advanced 0.96 percent, China Petroleum and Chemical (Sinopec) perked 0.24 percent, Huaneng Power surged 3.93 percent, China Shenhua Energy spiked 1.72 percent, Gemdale climbed 1.08 percent, Poly Developments gained 1.77 percent, China Vanke added 0.61 percent, China Fortune Land gathered 1.02 percent and Industrial and Commercial Bank of China and Bank of Communications were unchanged.

The lead from Wall Street is broadly positive as the major averages opened higher on Friday and accelerated as the session progressed, ending near daily highs.

The Dow surged 424/35 points or 1.27 percent to finish at 33,761.05, while the NASDAQ soared 267.29 points or 2.09 percent to end at 13,047.19 and the S&P 500 jumped 72.88 points or 1.73 percent to close at 4,280.15.

For the week, the S&P 500 skyrocketed 3.3 percent for its fourth straight weekly gain, while the NASDAQ spiked 3.1 percent and the Dow gained 2.9 percent.

Optimism that inflation has peaked contributed to the continued strength on Wall Street following tamer than expected readings last week on consumer and producer prices.

Adding to the positive sentiment about inflation, the Labor Department said U.S. import prices fell more than expected in July. Buying interest was also generated by a report from the University of Michigan showing U.S. consumer sentiment has improved much more than expected in August.

Crude oil prices fell sharply on Friday after the Organization of the Petroleum Exporting Countries (OPEC) lowered its oil demand forecast for 2022. West Texas Intermediate Crude oil futures for September ended lower by $2.25 or 2.4 percent at $92.09 a barrel. For the week, WIT rose 3.5 percent.

Closer to home, China will release July numbers later this morning for house prices, fixed asset investment, industrial production, retail sales and unemployment.

Industrial production is expected to rise 4.6 percent on year, up from 3.9 percent in June. Retail sales are expected to add an annual 5.0 percent, up from 3.1 percent in the previous month. FAI is pegged at 6.2 percent, up from 6.1 percent a month earlier. House prices were down 0.5 percent on year in June, while the jobless rate was 5.5 percent.

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