FX.co ★ Rebound Predicted For China Stock Market

The China stock market experienced a minor setback on Wednesday, concluding a two-day winning streak that saw gains exceeding 110 points, equating to a 3.3 percent rise. The Shanghai Composite Index settled just below the 3,385 mark but is anticipated to recover on Thursday.

Globally, the outlook for Asian markets is optimistic, buoyed by a decisive outcome in the U.S. presidential election. While European markets faced declines, U.S. markets ended the day on a positive note, which is expected to influence Asian markets favorably.

On Wednesday, the Shanghai Composite dipped slightly, reflecting losses in the financial sector, a rise in property stocks, and a mixed performance from resource stocks. The index dropped by 3.18 points, or 0.09 percent, to close at 3,383.81, within a trading range of 3,367.08 to 3,421.00. Meanwhile, the Shenzhen Composite Index edged up by 2.01 points, or 0.10 percent, ending the day at 2,049.78.

In the sectoral performance, Industrial and Commercial Bank of China decreased by 0.98 percent. Both Bank of China and Huaneng Power fell by 0.41 percent. China Construction Bank saw a decline of 1.36 percent, and China Merchants Bank dropped by 1.33 percent. Agricultural Bank of China shed 0.63 percent, and China Life Insurance plummeted by 2.08 percent. Jiangxi Copper slipped by 1.07 percent, while Aluminum Corp of China (Chalco) rose by 1.85 percent. Yankuang Energy declined by 0.82 percent, PetroChina by 0.24 percent, and China Shenhua Energy by 1.71 percent. Conversely, Gemdale surged by 2.44 percent, Poly Developments by 1.80 percent, China Vanke by 1.71 percent, while China Petroleum and Chemical (Sinopec) remained unchanged.

Wall Street’s performance was largely positive, with major indices opening higher and gaining momentum throughout the day, closing at session highs. The Dow Jones Industrial Average soared by 1,508.05 points, or 3.57 percent, finishing at 43,729.93. The NASDAQ surged by 544.29 points, or 2.95 percent, closing at 18,983.46, while the S&P 500 jumped by 146.28 points, or 2.53 percent, ending at 5,929.04.

The robust rally on Wall Street followed the announcement of former President Trump's victory in the presidential election over Vice President Kamala Harris, which alleviated concerns over a protracted vote-counting process and potential legal confrontations.

Market attention is now pivoting to the Federal Reserve, which is set to reveal its latest monetary policy stance. It is widely anticipated that the Fed will announce a 25 basis point reduction in interest rates, although the accompanying statement may influence expectations for future rate changes.

Oil prices dipped on Wednesday as U.S. crude inventories increased more than expected last week, compounded by the effect of a stronger dollar. West Texas Intermediate crude oil futures for December ended the session at $71.69 per barrel, down by $0.30 or 0.42 percent.