In recent trading, the Chinese stock market has experienced a downturn, declining for three consecutive sessions and losing nearly 200 points, which equates to a 6% drop. Consequently, the Shanghai Composite Index now rests slightly above the 3,210-point mark, though indications suggest potential support on Monday.
The outlook for Asian markets is generally positive, bolstered especially by gains anticipated in technology and oil stocks. While European markets finished lower, both the U.S. and Asian markets are expected to follow a more optimistic trajectory.
On Friday, the Shanghai Composite Index (SCI) faced significant losses, driven by declines in the property sector despite some support from resource stocks and varied performances within the financial sector. Specifically, the index fell by 51.13 points or 1.57%, closing at 3,211.43, with a trading range between 3,205.78 and 3,273.57. Meanwhile, the Shenzhen Composite Index saw a sharper decline, dropping 50.58 points or 2.65% to conclude at 1,856.46.
In terms of individual stocks, Industrial and Commercial Bank of China decreased by 1.32%, Bank of China by 0.37%, and China Construction Bank by 1.40%. China Merchants Bank, however, saw a slight increase of 0.39%, while Agricultural Bank of China fell 0.96%. China Life Insurance experienced a 1.26% decrease, Jiangxi Copper rose by 1.04%, and Aluminum Corp of China (Chalco) gained 1.39%. Yankuang Energy advanced by 0.36%, PetroChina by 0.91%, and China Petroleum and Chemical (Sinopec) by 0.15%. Huaneng Power inched up by 0.30%, whereas China Shenhua Energy dropped 1.22%, Gemdale fell 1.37%, Poly Developments declined by 1.61%, and China Vanke retreated 1.55%.
Contrastingly, Wall Street closed on a positive note, with major indices opening in the green and maintaining gains throughout the day to finish near their session highs. The Dow Jones Industrial Average rose 339.83 points or 0.80% to 42,732.13. Meanwhile, the NASDAQ surged 340.88 points or 1.77% to 19,621.68, and the S&P 500 increased by 73.92 points or 1.26% to 5,942.47.
Throughout the holiday-shortened week, the Dow decreased by 0.6%, while both the NASDAQ and the S&P 500 saw a 0.5% decline. The recovery in U.S. markets was driven by traders seeking to acquire stocks at lower valuations following recent declines, though trading activity was somewhat subdued post the New Year's Day holiday.
In economic developments, the Institute for Supply Management reported that U.S. manufacturing activity contracted at a reduced pace in December. Additionally, oil prices saw an uptick on Friday owing to promising demand projections, fueled by recent data indicating a decrease in U.S. crude inventories. West Texas Intermediate Crude oil futures for February rose by $0.83 or 1.13%, closing at $73.96 per barrel.
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