Following a break for Labor Day, the Chinese stock market has found its groove again, innovatively shaking off the end of a four-day winning streak which saw it gain log almost 100 points or 3 percent. The Shanghai Composite Index is now comfortably resting above the 3,140-point plateau and is poised to receive continued support on Tuesday. The renewed optimism regarding interest rate forecasts has bolstered the positive global outlook for Asian markets. Both European and US markets ended significantly higher, and it seems likely that Asian markets will follow in their footsteps.
On Monday, the Shanghai Composite Index (SCI) enjoyed an impressive surge, propelled by gains among insurance companies and a mixed bag of results from the resource and property stocks. The index elevated 35.90 points, or 1.16 percent, ending at 3,140.72, after its performance ranged from 3,126.77 to 3,142.38. Its counterpart, the Shenzhen Composite Index, saw a surge of 36.33 points or 2.07 percent, closing at 1,792.41.
Performance among the active players was varied; Industrial and Commercial Bank of China saw a 1.10 percent downward slide, and Bank of China witnessed a 2.40 percent drop. Other losses occurred in China Construction Bank and China Shenhua Energy, which both declined by 0.70 percent, and Bank of Communications, which fell 1.31 percent. However, there were also increases, with China Life Insurance seeing a rise of 3.26 percent, China Merchants Bank strengthening by 1.66 percent, and China State Construction Engineering climbing by 1.12 percent.
Wall Street's major players started strong on Monday and sustained this throughout the day, creating an overall positive atmosphere. Reflections of this were seen in the Dow advancing 176.59 points, NASDAQ rallying 192.92 points, and the S&P 500 improving by 52.95 points.
Stocks have been benefiting from the upward momentum of the previous two sessions, partly driven by renewed optimism about projections for interest rates. Confidence in a rate cut in the upcoming months has been growing, spurred on by understated remarks from Federal Reserve Chair Jerome Powell about potentially raising rates off the back of weaker-than-expected job growth in April. The chance of rates being lower by September now stands at a promising 83.5 percent, according to CME Group's FedWatch Tool.
Crude oil futures also experienced a modest rise on Monday, owing to Saudi Arabia's decision to increase its selling price for European and Asian markets. Resultantly, West Texas Intermediate Crude oil futures for June ended higher by $0.37 or 0.47 percent at $78.48 a barrel.
