China’s Shanghai Composite Index pulled back on Wednesday and broke the three-day gaining streak. Carrying forward the weakness, the Shanghai Composite Index opened lower on July 12. However, the Shanghai Composite Index regained strength as the day progressed and closed at two-week high price levels on Thursday.
The Shanghai Composite Index declined on Wednesday as a US trade representative announced plans to impose additional import tariffs on $200 billion worth of Chinese goods. However, Asian markets rebounded on Thursday amid bargain hunting at lower levels and the market’s improved risk appetite. The market sentiment on the Shanghai Composite Index improved after ZTE signed an agreement with the US that would allow the company to resume its business with US suppliers. According to the Department of Commerce, the three-month ban on ZTE will be removed after $400 million is deposited in an escrow account.
On July 12, the Shanghai Composite Index gained 2.18% and closed the day at 2,838.30. The SPDR S&P China (GXC) fell 1.63% on Wednesday.
After declining for two consecutive trading days, the Hang Seng Index regained strength on Thursday and closed higher. The rebound in China’s markets and bargain hunting supported the Hang Seng Index’s recovery on Thursday. With no major economic data for Hong Kong scheduled to be released this week, the market movements are expected to be driven by investors’ response to updates on US-China trade policy.
On July 12, the Hang Seng Index gained 0.74% and closed the day at 28,522.00. The Shares MSCI Hong Kong (EWH) fell 1.23% on Wednesday.
After breaking the three-day gaining streak on Wednesday, Japan’s Nikkei Index moved higher on July 12. Increased buying amid bargain hunting at lower levels boosted the Nikkei Index on Thursday. The weaker yen also supported the Nikkei Index’s rebound. The Nikkei Index gained 1.12% and closed the day at 22,177.00. The iShares MSCI Japan (EWJ) fell 1.38% on Wednesday.
Next, we’ll discuss how US markets performed on July 11.