FX.co ★ China Stocks Slip as Factory Activity Contracts

On Friday, the Shanghai Composite Index experienced a modest decline of 0.37%, settling at 3,560, while the Shenzhen Component Index decreased by 0.17% to close at 10,991. This downturn marked the end of a five-week winning streak, as weaker-than-anticipated manufacturing data impacted market sentiment. According to a private survey, factory activity slipped back into contraction in July, falling short of expectations for a second consecutive month of growth amid ongoing global trade uncertainties. Although trade discussions between US and Chinese officials concluded in Stockholm earlier this week, President Donald Trump has yet to authorize an extension of the current tariff truce. This added to investor unease. Additionally, the recent Politburo meeting failed to deliver significant economic stimulus, disappointing markets that were hoping for more robust policy measures to tackle deflationary pressures and sluggish growth. The technology sector experienced significant losses, with Eoptolink Technology and Zhongji Innolight both declining by 3.2%, while Foxconn suffered a 4.7% drop.