Chinese industrial profits plunged

Chinese industrial profits plunged

Global stock index & Chinese Industrial profit trending points

  • A global equity rally steamed by Wall Street surge, ran out of fuel on Thursday, as S&P remained neutral, and Dow Jones Industrial posted a pause in its dramatic surge
  • The surge of US stocks chiefly boosted by US sales data released later on Wednesday, which helped to score a record gain for Dow Jones Industrials.
  • The global stock rally took a pause, as Chinese industrial profit faltered, and reminded the investors, how influential the US-China trade dispute could be for 2019’s uncertain market.

Post-Christmas rally took a pause on crumbling Chinese industrial data

On Wednesday, the 26thof December, the global stocks had been fuelled by a dramatic surge on Wall St. catalysed by strong US sales data and the Dow Jones Industrial posted a record gain. However, on Thursday, the 27thof December, the global stock rally appeared to lack momentum and faltered again, as Chinese Industrial profits faltered.

Despite Wednesday’s histrionic overhaul, lifted by Dow Jones Industrial’s 1000 point-plus gain, the world stocks are swaying near their two-yearly lows, as the market whirled again on Thursday, led by another agonizing fall of European stocks in to their November 2016 lows.

However, Asian stocks remained adroit and the Chinese stocks had posted a gain Thursday as well. Yet, the investors are anxiously waiting for US market opening, as a defaulted Chinese market profit could hurt Wall St. concomitantly.

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Nikkei 225 daily chartNikkei 225 daily chart

Earlier on Thursday, in the Asia Pacific session, the Wednesday’s rally appeared to presume with full throttle and the MSCI world index, that keeps track of shares of 47 countries, jolted 0.4 percent higher, apart from its 2.3 percent gain on later part of Wednesday.

The gains started to shrink after GMT. 11.00, December 27th, as Pan-European equity index had plunged by 1.1 percent after a strong gain in the Asian trading hours. In fact, the plunge initiated after the closure of Asian markets, and analysts had been blaming weaker Chinese Industrial profit behind this halted market heave.

After GMT 14.00, December 27th, the German shares drained 2 percent and the equity futures for the Dow Jones index plunged by 1.5 percent, while the Standard & Poor 500 and the tech heavy Nasdaq Composite have been expecting a weaker opening as well.

Bottom Line

As the index gains had halted at the end of Asian trading hours, the bearish market momentum might persist till the end of the year and 2019 might post the worst year for multiple indexes, since the great financial depression of 2008.

During the Asia Pacific session, the Japanese Nikkei 225, managed to continue the Santa rally and posted a 3.88 percent gain, while the Australian shares rose strongly, alongside, markets in mainland China. However, the HKG 33 drained 0.4 percent, on the release of China’s industrial data, which had shown a trim in China’s industrial profit for the first time in nearly three years.

So far, there had not been any kind of fundamental policy change or market data, that could suggest a buoyant buying opportunity. For now, sellers are still in charge of global indexes, despite Wednesday’s dramatic Santa rally on strong US sales data, and investors should anticipate an effusive volatility over the next couple of days.

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[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]


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