10:00 AM EST – US factory orders (May)
2:00 PM EST – US FOMC meeting minutes
China’s Shanghai Composite Index started this week on a stable note. However, it pulled back on July 4 amid the market correction and decreased risk appetite. The Shanghai Composite Index opened lower on July 5 but quickly regained strength and rose as the day progressed.
North Korea successfully launched an intercontinental ballistic missile, which raised geopolitical tension on July 4. The tension was reflected in global markets’ performances on Tuesday. In addition to dented global sentiment, the correction move in China’s blue-chip stocks pulled markets lower on Tuesday. However, markets shrugged off concerns on Wednesday and regained strength. The rally in blue-chip insurance stocks supported the Shanghai Composite Index. Markets also welcomed the Chinese government’s move to encourage pension funds to invest in capital markets. The move is expected to provide long-term stability to the mainland’s capital markets.
On July 5, the Shanghai Composite Index rose 0.76% and ended the day at 3,207.13. The SPDR S&P China ETF (GXC) rose 0.83% to $90.02 on July 3.
After suffering the worst one-day fall in 2017 on July 4, Hong Kong’s Hang Seng Index regained strength on Wednesday. The rebound of Tencent shares and improved global sentiment supported the rally in the Hang Seng Index. The slump in the Hang Seng Index’s heavyweight stock Tencent to a seven-week low weighed on the market on July 4. The index rose 0.52% and closed the day at 25,521.97. The iShares MSCI Hong Kong ETF (EWH) fell 0.38% to $23.34 on July 3.
Japan’s Nikkei Index started Wednesday on a weaker note by opening lower and falling below the important level of 19,900. However, the market regained strength amid a rally in Asian markets and ended the day above 20,000. Strength in the mining, automobile, and insurance sectors also supported the Nikkei Index. It rose 0.25% and closed the day at 20,081.63.
The iShares MSCI Japan ETF (EWJ) closed at $53.39—a fall of 0.48%, on July 3. In the next part, we’ll discuss how European markets performed in the morning session on July 5.