Shanghai Stocks See Decline After Hitting 10-Year High
After peaking at a ten-year high, the Shanghai stock benchmark fell as investors shifted to undervalued sectors. Despite the drop, trading enthusiasm remains high, with record turnovers. Analysts are debating the sustainability of current market momentum amid technical exhaustion indicators and evolving U.S.-China relations.
The Shanghai stock benchmark retreated to close lower after hitting a fresh ten-year high on Tuesday, as investors moved towards undervalued sectors post a significant rally. The Shanghai Composite Index ended 0.4% down at 3,868.38, relinquishing gains that had elevated it to levels last seen in August 2015.
Investor enthusiasm remains robust, evidenced by a consecutive ten-session streak where combined turnovers on the Shanghai and Shenzhen exchanges surpassed 2 trillion yuan ($279.61 billion). Despite this high level of activity, technical indicators are showing signs of trader fatigue, following a 25% rally in the Shanghai index since April.
In contrast, the real estate and rare earth sectors suffered losses, with the latter affected by geopolitical tensions following statements from former U.S. President Donald Trump. Meanwhile, the consumer staples and liquor sectors showed modest gains, indicating a mixed performance across industries.
(With inputs from agencies.)
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