On Monday, China's stock market broke its eight-day winning streak where it had skyrocketed over 300 points or 10.9 percent. Now, the Shanghai Composite Index just sits slightly above the 2,975-point plateau. This trend could prolong due to continued selling to secure profits. The worldwide prognosis for Asian markets is cautious ahead of significant economic data expected later this week. Europe's markets offered a mixed reaction while the U.S. markets dipped, potentially setting a trend for the Asian sectors to follow.
Monday saw modest drops in the Shanghai Composite Index (SCI), largely influenced by losses in financial, property, and resource sectors. The index fell 27.86 points or 0.93 percent, closing at 2,977.02, with the trading spectrum ranging from 2,967.06 to 3,009.48. Concurrently, the Shenzhen Composite Index rose by 7.30 points or 0.44 percent, ending at 1,677.15.
Among the active stocks, Industrial and Commercial Bank of China dropped by 2.92 percent and Bank of China decreased by 3.02 percent. Other significant declines include China Construction Bank with a 3.20 percent stumble, China Merchants Bank's 2.12 percent slump, Bank of Communications' 3.08 percent slide, and China Life Insurance's 3.65 percent tumble. Stocks of major resource companies such as Jiangxi Copper, Aluminum Corp of China (Chalco), Yankuang Energy, PetroChina, and China Petroleum and Chemical (Sinopec) also experienced notable reductions. Notably, Huaneng Power and China Shenhua Energy lost 2.78 percent and 3.14 percent respectively. Additionally, property stocks like Gemdale, Poly Developments, and China Vanke fell by 1.84 percent, 1.80 percent, and 2.16 percent respectively.
Wall Street's influence was weak, with the major averages starting a little higher on Monday but waning as the day unfolded, culminating in modest losses. The Dow fell 62.30 points, settling at 39,069.23, while NASDAQ lost 20.57 points, closing at 15,976.25 and the S&P 500 dropped 19.27 points, finishing at 5,069.53.
Traders seemingly showed reluctance in making significant moves against a backdrop of last week's gains, rising the Dow and S&P 500 to new record highs. This caution continued in anticipation of upcoming key inflation reports this week, which involve Germany, France, Spain, and the U.S.
Elsewhere, despite a short rise in new home sales in the U.S. in January as reported by the Commerce Department, the increase didn't meet expectations. Monday also witnessed a surge in oil prices, overcoming initial losses. Ongoing attacks by Houthi militants in the Red Sea posed concerns about supply shortages, causing West Texas Intermediate Crude oil futures for April to close higher at $77.58 a barrel, a solid increase of $1.09 or 1.4 percent.
