FX.co ★ China Stock Market Expected To Open Under Water On Tuesday

The Chinese stock market experienced a slight downturn on Monday, halting a two-day winning streak during which it gained nearly 40 points, or 1.2%. The Shanghai Composite Index has now positioned itself just above the 3,400-point threshold, signaling potential for accelerated losses on Tuesday.

The forecast for Asian markets appears subdued, primarily due to weakness in technology stocks and anticipation surrounding significant U.S. inflation data expected later in the week. European markets exhibited mixed performances, while U.S. markets faced declines, suggesting that Asian markets might present a blend of these outcomes.

On Monday, the Shanghai Composite slid marginally, as declines in the property sector were cushioned by gains in energy companies, alongside a mixed performance in the financial sector.

The index decreased by 1.54 points, or 0.05%, concluding the day at 3,402.53, moving within a range of 3,385.96 to 3,426.65. Meanwhile, the Shenzhen Composite Index fell by 7.32 points, or 0.35%, finishing at 2,057.32.

Among notable movements, Bank of China advanced 0.98%, China Construction Bank slipped 0.24%, and Agricultural Bank of China increased by 1.21%. China Life Insurance gained 0.71% whereas Jiangxi Copper declined 0.42%. Yankuang Energy added 0.54%, PetroChina rallied 1.32%, and China Petroleum and Chemical (Sinopec) climbed 0.94%. Huaneng Power rose 0.84%, China Shenhua Energy grew by 0.38%, while Gemdale plummeted 4.63%, Poly Developments dropped 2.76%, and China Vanke fell 3.00%. Industrial and Commercial Bank of China, China Merchants Bank, and Aluminum Corp of China (Chalco) remained unchanged.

As for Wall Street, it presented a negative outlook, with major indices starting off mixed but quickly moving into negative territory for the remainder of the session.

The Dow Jones Industrial Average decreased by 240.59 points, or 0.54%, to close at 44,401.93. The NASDAQ fell 123.08 points, or 0.62%, ending at 19,736.69, while the S&P 500 declined 37.42 points, or 0.61%, to settle at 6,052.85.

The market downturn was influenced by a notable drop in Nvidia's shares, which fell 2.6% following news that a Chinese regulator initiated an investigation to determine if the chipmaker breached antimonopoly laws.

This decline was also fueled by investor anticipation of key U.S. inflation data due later in the week. Although the Federal Reserve is expected to reduce interest rates by another 25 basis points next week, there remains uncertainty about the trajectory of rate cuts in the coming year.

Oil prices saw an upward trend amid geopolitical tensions and optimism that China's central bank might ease monetary policy to spur economic growth. West Texas Intermediate Crude oil futures for January delivery rose by $1.17, or 1.74%, reaching $68.37 per barrel.

Domestically, China is set to release November trade data later today. In October, imports decreased by 2.3% year-on-year, while exports increased by 12.7%, resulting in a trade surplus of $95.72 billion.