SSEC: Main Chinese Index Breaks 6-Day Gain Streak
On Tuesday, stocks in China traded lower on what could’ve been the seventh day on an ongoing gain streak. Chinese shares dropped as the continuity of Sino-US concerns may have driven investors to lock in their profits.
The Shanghai Composite Index (.SSEC) dropped 0.87% to 2,982.07 from the previous close. The Shanghai Composite increased more than 4%—prior to the decline—in six straight trading days, which was the first gain-streak since February of last year.
The CSI300 Index was down 1.04% as the market closed. Most of the blue-chip’s sub-index also dropped lower—its financial sector was down by 1.5%, the consumer staples sector was lower by 0.55%, real estate by 0.74%, and healthcare sector slightly lower by 0.13%
The Shenzhen Index closed the trading day at a position 0.99% lower, while the ChiNext Composite Index also dropped by 1.06%.
Chifeng Jilong Gold Mining Co. Ltd. and Shanghai Jinqiao Export Processing Zone Development Co. Ltd. were at the top of the leaderboards in the main Shanghai Composite Index (.SSEC). Both companies’ stocks were up by 10.05% and 10.03% respectively. TKD Science and Technology Co. Ltd. came in third with a 10.02 increase in stock price.
On the flip side, both KPC Pharmaceuticals Inc. and Xinjiang Tianfu Energy Co. Ltd were decreased 10.02% from the previous trading day, followed by BGRIMM Technology Co Ltd, which was down by 10%.
In an optimistic view, the Shanghai Stock Index is up 19.6 % this year while the CSI300 rose 26.3%. China’s H-share index was up by 6.1%.
Overall, Shanghai stocks have risen 2.88% for the month of June.
Chinese Banks Under Pressure
Chinese banking stocks were vulnerable to an economic slowdown as the FTSE China A 600, the index that measures Chinese banks, fell 2.12%. The Central Bank of China said that banks had started to offer loans to smaller firms for the first five months of the year.
The Shanghai Pudong Development Bank (SPDB) Co. Ltd. may also lose its access to the U.S. financial system causing Chinese banks to come under fire. A U.S. judge found out that the bank is in contempt for refusal to comply with subpoenas in an investigation regarding violations of North Korean sanctions.
SBDP shares were down by 2.99% during the trade session.
The bank, consequently, said on Tuesday that it will abide by the laws and regulations after being called out.
The China Merchants Banks, in addition, said it has no involvement in any investigations that connect to any violations of sanctions same as aforementioned. However, shares of the bank fell as much as 8.46% during the day and closed at 4.82% lower.
Effects of the Trade War
On Monday, a senior U.S. official reassured against concerns on the United States and China’s trade talks and the possibility of little to no progress at all during the upcoming G20 summit in Japan.
According to him, US President Trump is “comfortable with any outcome” from the upcoming meeting with Chinese President Xi Jinping this week.
The tariff war between the two countries had been going on since March 22 of last year.
The latest headlines are emphasizing on Trump’s May 15 restriction of U.S.-based tech companies to export to those who fall under an “entity list” affecting many components of the Shanghai Composite Index (.SSEC), and the recently decided tariff raise by China on $60 billion worth of U.S. goods.
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