Stock market in China expected to undergo consolidation
Stock Markets and Trade Deals: A Recap
The Shanghai Composite Index (SCI) and the Shenzhen Composite Index finished higher in six consecutive sessions, with the SCI gaining over 100 points or 2.8 percent. The SCI currently sits above the 3,600-point plateau.
In the world of commodities, crude oil rose on Thursday, with West Texas Intermediate crude for September up $0.87 or 1.33 percent to $66.12 per barrel. The U.S. Energy Information Administration reported that crude stockpiles declined more than expected last week.
China's stock market saw mixed performances among its major players. Gemdale, Aluminum Corp of China (Chalco), Jiangxi Copper, and Yankuang Energy all saw gains, while China Shenhua Energy, Agricultural Bank of China, Bank of Communications, Bank of China, Huaneng Power, and China Merchants Bank all experienced losses. Poly Developments, China Vanke, and China Life Insurance saw moderate gains. PetroChina and China Petroleum and Chemical (Sinopec) experienced losses.
The U.S. trade strategy under the Trump administration in 2025 focuses on reciprocal tariffs to balance trade deficits and secure investments. The U.S. has entered several new trade arrangements, including a historic deal with Indonesia, where reciprocal tariff rates are set at 19%. The U.S. also secured a landmark U.S.–Japan strategic trade and investment agreement, setting a baseline 15% tariff on Japanese imports and establishing a $550 billion investment fund.
The U.S. has paused most country-specific reciprocal tariffs, including those affecting Canada, lowering tariffs to 10% for 90 days, but no permanent deal is confirmed yet. The current status of U.S.-India and South Korea trade deals is unclear, and no specific information on U.S.-EU trade negotiations or agreements was found in the available results.
U.S. Secretary of the Treasury Scott Bessent stated that the talks were "going better than they had been," and that progress was being made. However, a downward correction is expected for the SCI on Friday.
In the U.S., new home sales rebounded less than expected in June, according to the Commerce Department.
Sources:
- Trump's Tariff Strategy
- U.S.-Indonesia Trade Deal
- U.S.-Japan Trade Agreement
- U.S.-Canada Tariff Pause
- To capitalize on the current state of the Chinese stock market and the ongoing trade deals, an investor might consider allocating funds in companieslike Gemdale, PetroChina, and China Life Insurance, while also focusing on the global oil market and investments in crude oil, such as West Texas Intermediate.
- As the U.S. continues to negotiate various trade deals, including those with Japan, Indonesia, Canada, India, South Korea, and the EU, informed investors may view this period as an opportunity for strategic investing in sectors potentially influenced by reciprocal tariff rates, such as the automotive industry or electronics, with a keen eye on any developments in the trade negotiations and their impact on stock-market performance.
