The Shanghai Composite (
) ended the day roughly flat, down less than 0.1%. However,
juxtaposed to other Asian markets' performance and interday market
action, the Shanghai Composite traded disappointingly to start the
[caption id="attachment_59727" align="alignright" width="300"
caption="Shanghai skyline at night"]
On the back of news that Cyprus would agree to the terms of a
Asian markets rallied
after suffering their worst week since August.
The Nikkei 225 (
) jumped 1.7%, the Kospi (
) rose 1.4%, and the Hang Seng (
) ended up 0.7%.
However, the Shanghai Composite was unable to mimic the
performance of its Asian counterparts, in spite of opening up
sharply higher on the back of earnings.
China Petroleum and Chemical Corp. (
) and China Construction Bank (
) both posted higher-than-expected profits, helping to lift stocks
in Hong Kong but the expected boost that these companies' positive
reports should have give to the Shanghai Composite as a whole did
non materialize. The market jumped early on the news, but this move
was only temporary; within the first hour of trading, the Shanghai
Composite was already in negative territory.
This price action in the Chinese benchmark index is troubling
for traders looking for the exchange to move higher.
The Shanghai Composite traded erratically last week,
suffering major losses early in the week
after the initial details of the Cyprus bailout were released, only
to see those losses erased midweek
after Tom DeMark called a short-term bottom in the exchange and the
HSBC Flash PMI come in better than expected.
However, these positive catalysts were insufficient to propel
the index out of its short-term downtrend. Today 's mediocre price
action could indicate that the Shanghai Composite has farther to
fall before it finds its bottom. If the Shanghai Composite is to
attain the large gains predicted by pundits over the next several
months, the exchange will have to start to outperform on days with
plenty of positive news.