The Chinese stock market experienced a rebound on Tuesday, breaking a four-day losing streak during which it had declined by over 200 points or approximately 6%. The Shanghai Composite Index is now positioned just below the 3,230 mark, although analysts anticipate renewed selling pressure as the market reopens on Wednesday.
The global outlook for Asian markets remains bleak, fueled by ongoing apprehensions about interest rate trajectories. While European markets showed mixed outcomes, U.S. markets suffered setbacks, potentially influencing a downward trend across Asian markets.
On Tuesday, the Shanghai Composite Index (SCI) made moderate gains, buoyed by financial and real estate sectors, though offset by declines in the energy sector. Specifically, the index gained 22.72 points or 0.71%, closing at 3,229.64, with fluctuations between 3,190.46 and 3,230.85. Meanwhile, the Shenzhen Composite Index advanced by 29.56 points or 1.60%, closing at 1,879.02.
Notable performers included the Industrial and Commercial Bank of China, which rose by 1.21%, and Bank of China, which saw a 1.30% increase. China Construction Bank climbed by 2.00%, China Merchants Bank by 1.35%, and Agricultural Bank of China also by 1.35%. Conversely, China Life Insurance declined by 0.59%, while Jiangxi Copper edged up by 0.97% and Aluminum Corp of China (Chalco) rose slightly by 0.28%. On the other hand, Yankuang Energy fell by 1.01%, PetroChina by 0.79%, and both China Petroleum and Chemical (Sinopec) and Huaneng Power decreased by 0.46%. China Shenhua Energy saw a decline of 1.70%, whereas Gemdale surged by 3.27%, Poly Developments strengthened by 1.52%, and China Vanke improved by 1.00%.
Wall Street's performance offers little positive guidance, as major indices began slightly positive on Tuesday but swiftly reversed to close substantially lower. The Dow Jones Industrial Average fell by 178.20 points or 0.42%, settling at 42,528.36. The NASDAQ plunged by 375.30 points or 1.89%, to finish at 19,489.68, while the S&P 500 declined by 66.35 points or 1.11%, concluding at 5,909.03.
This significant stock pullback coincided with a marked increase in treasury yields, with the benchmark 10-year note yield reaching its highest closing level in eight months. This rise in yields triggered concerns regarding the outlook for interest rates, heightened by robust U.S. economic data.
The Institute for Supply Management reported an unexpected increase in U.S. service sector activity in December, alongside a surge in the prices index to a one-year high, fueling fears of persistent inflation. Additionally, the Labor Department revealed that U.S. job openings unexpectedly rose in November.
Oil prices experienced an uptick on Tuesday, driven by potential supply constraints after China opted to reject imports from Iran and Russia. Unseasonably cold weather in the U.S. also contributed to the increase. West Texas Intermediate Crude oil futures for February rose by $0.69 or 0.94%, closing at $74.25 a barrel.
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