Chinese stocks broadly fell last week. Higher oil prices, rising global bond yields and weak PMI data heightened concerns over the economic outlook.
China’s Shanghai Composite closed at 3930.12 last week, down 0.6% on a weekly basis. The index rebounded at the start of the week, but then alternated between modest gains and further declines before falling again at the end of the week.
In the first half of the week, heightened tensions in the Middle East intensified concerns over the domestic economy, while property stocks plunged on concerns over worsening financing conditions in the sector. Movements in technology stocks related to cloud computing and semiconductors, as well as bank stocks, offset the decline.
In the latter half of the week, selling prevailed as tensions in the Middle East weighed on sentiment, with technology stocks leading the decline. Liquor and consumer staples stocks, viewed as defensive sectors, attracted buying, limiting the downside. Toward the end of the week, higher oil prices and rising bond yields strengthened risk aversion.
At the end of the week, developments in US-China relations and stocks related to AI and supply chains remained volatile, while a favorable reading of the Caixin PMI and gains in property stocks supported the market. Next week, the release of key economic indicators and commodity-market developments will be in focus.