The Chinese stock market has experienced a downturn for two consecutive sessions, losing over 60 points, equating to a 2% drop. Currently, the Shanghai Composite Index is positioned slightly under the 3,170 threshold, with expectations of further consolidation on Monday.
The global outlook for Asian markets is predominantly negative, influenced significantly by robust U.S. employment figures, which have dampened interest rate forecasts. Both European and U.S. markets closed substantially lower, suggesting a similar opening trend for Asian markets.
On Friday, the Shanghai Composite Index (SCI) recorded a sharp decline attributed to losses in financial shares, oil companies, property stocks, and resource sectors. The index fell by 42.87 points, or 1.33%, settling at a daily low of 3,168.52, after peaking at 3,220.11. Meanwhile, the Shenzhen Composite Index dropped 41.65 points, or 2.22%, concluding at 1,837.28.
Notable movements among active stocks included Industrial and Commercial Bank of China decreasing by 0.60%, Bank of China by 0.18%, and China Construction Bank by 1.29%. Other significant changes included China Merchants Bank easing by 0.05%, Agricultural Bank of China fell 0.78%, and China Life Insurance dropped 2.18%. Among resource companies, Jiangxi Copper fell 0.68%, Aluminum Corp of China (Chalco) rose by 0.83%, while Yankuang Energy decreased 2.02%. In the energy sector, PetroChina saw a 0.79% decline, China Petroleum and Chemical (Sinopec) dropped 1.87%, and Huaneng Power fell 2.81%. China Shenhua Energy decreased by 0.99%, with significant downtrends observed in property developers, as Gemdale plunged 3.85%, Poly Developments declined 1.97%, and China Vanke fell 3.74%.
Wall Street presents a gloomy outlook, with major indices opening sharply lower on Friday and maintaining that trend throughout the trading session. The Dow lost 696.75 points, or 1.63%, ending at 41,938.45, while the NASDAQ dropped 317.27 points, or 1.63%, to close at 19,161.63. The S&P 500 saw a decrease of 91.21 points, or 1.54%, finishing at 5,827.04.
The downturn on Wall Street was prompted by strong non-farm payroll data, sparking concerns that the Federal Reserve might maintain current interest rates or decelerate the pace of reductions. The report indicates sustained strength in the U.S. labor market, which could affirm the Federal Reserve's strategy to gradually decrease interest rates over the following year.
Oil prices surged on Friday, influenced by the Biden Administration's announcement of additional sanctions on Russian oil exports. West Texas Intermediate Crude oil futures for February rose by $2.65, or 3.6%, closing at $76.57 per barrel, marking the highest settlement in three months.
Domestically, China is set to release December's figures on imports, exports, and trade balance later today. Imports are anticipated to decline by 1.5% year-on-year, after a previous drop of 3.9% in November. Exports are projected to increase by 7.3% annually, up from 6.7% the previous month, with the trade surplus expected to reach $100.00 billion, rising from $97.44 billion in the preceding month.
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