China Equity Market Pulls Back from Momentum as Uncertainty Looms

The China stock market’s impressive nine-session rally has come to a brief halt, though the broader picture remains constructive. After climbing more than 140 points or 3.5 percent during its winning streak, the market is now consolidating around key levels heading into the week.

The Shanghai Composite Index currently trades just below the 3,970-point mark, closing Friday at 3,968.84 with a modest gain of 3.72 points (0.09 percent). The move was supported by strength in financials, real estate, and commodity-linked stocks. Meanwhile, the Shenzhen Composite Index retreated 7.73 points or 0.30 percent to settle at 2,530.96, suggesting some divergence between the two main bourses.

Individual stock movements tell an interesting story. The banking sector showed resilience, with Industrial and Commercial Bank of China rising 1.02 percent and Bank of China climbing 1.06 percent. Agricultural Bank of China gained 0.92 percent, though China Merchants Bank slipped 0.43 percent. Energy and materials led the charge, with Jiangxi Copper skyrocketing 9.29 percent—the standout performer of the session. PetroChina rallied 1.56 percent while Aluminum Corp of China (Chalco) jumped 1.54 percent. On the downside, China Petroleum and Chemical (Sinopec) shed 0.59 percent and Yankuang Energy sank 0.75 percent.

Headwinds ahead. Geopolitical tensions in South America pose a risk to sentiment, with crude oil falling ahead of Sunday’s OPEC meeting. West Texas Intermediate crude slipped to $57.30, down 0.2 percent. The broader Asian markets are expected to open mixed as traders assess the week’s direction, and the China equity market may face opening pressure despite the recent positive momentum.

Wall Street’s mixed performance—with the Dow up 0.66 percent while the NASDAQ dipped 0.03 percent—suggests caution is warranted. The property sector remains a key watch, as Gemdale, Poly Developments, and China Vanke posted modest gains, indicating selective buying in the real estate space.