The Chinese blue chip share index of 50 stocks is backing off from key resistance, but selling is light.
CHINA 50 – Weekly Chart
The price of CHINA 50 has hit resistance at the 15,580 level and the 2024 high is above 16,000. These are the key levels over the coming weeks to keep the bull market alive.
Global markets were lower on valuation concerns, but selling was mild in Shanghai, with gains in photovoltaic and coal shares. The CEOs of Wall Street investment banking giants Morgan Stanley and Goldman Sachs on Tuesday warned that equity markets were at risk of a drawdown.
“The lack of a single clear catalyst suggests that investor caution is being driven by a combination of macroeconomic uncertainties, including concerns about growth prospects, ongoing government shutdown negotiations in the US, and heightened scrutiny of capital expenditure in key industries,” said Shier Lee Lim, macro strategist for APAC.
Meanwhile, Chinese Premier Li Qiang said trade restrictions have created barriers to business, and Beijing would work to reform global economic and trade systems to make them fairer.
After the recent trade truce, Chinese economic data will come back to the top of traders’ agenda. Service activity expanded in the country but at its slowest pace in three months, due to a decline in overseas orders. Domestic demand helped cushion some of the drop, a private survey revealed on Wednesday. China is scheduled to release its latest trade data on Friday and inflation figures on Sunday.
The Starbucks coffee chain has said that it is changing its China strategy due to competition in the domestic market. The Seattle coffee giant said it would enter into a joint venture with Boyu Capital, a large Chinese private equity firm. Starbucks will transfer the majority of its control to Boyu, which includes 8,000 outlets, while retaining ownership of its brand and licensing.
