Chinese stocks fell last week, with the Shanghai Composite reversing lower toward the end of the week. As skepticism among investors grew ahead of the US-China summit, the impact extended across the BRICs markets. This week's outlook remains uncertain, with the focus on prospects for an extension of the trade talks and key economic indicators.
In China's stock market last week, the Shanghai Composite closed at 3,888.37 on the 24th, down 0.6% from the previous week, marking a weekly decline. The index rose at the start of the week, posting modest gains for 3 consecutive days, before falling again on the 23rd and 24th.
In the first half of the week, the central bank's decision to leave the 1-year LPR at 3.0% and the 5-year rate at 3.5%, both unchanged for 16 consecutive months, provided a buying catalyst. A meeting between the US Treasury Secretary and China's Vice Premier ahead of the US-China summit was also a supportive factor.
In the second half of the week, buying turned cautious with the US-China summit imminent, and declines in major cloud and power stocks drove the index slightly lower. Uncertainty surrounding prospects for an extension of the temporary truce in the US-China trade war increased, and skepticism grew.
This week, attention is expected to focus on Middle East developments, oil prices, US-China relations involving technology stocks, China's domestic property-sector debt overhang, the renminbi, and commodity prices. Key scheduled indicators include August industrial profits and September PMI data. Markets will also be closed on some days for the National Day holiday.
Related names cited include the Shanghai Stock Exchange 50-linked product, Listed Panda, and H-Share Bull and H-Share Bear products.