China's Shanghai Composite Index opens down 0.1% to 3,568.26

China's Shanghai Composite Index opens down 0.1% to 3,568.26

The Shanghai Composite Index, a key benchmark for China's stock market, opened lower on Monday, July 2, 2025, after a weekend of weak economic data. The index started the day at 3,568.26, marking a 0.1% decline from its previous close.

The downturn can be attributed to the latest manufacturing PMI data from the National Bureau of Statistics (NBS) [1]. The manufacturing PMI, which measures the health of the manufacturing sector, fell to 49.3 in July, indicating a contraction for the third consecutive month. This is the lowest reading since April. The non-manufacturing PMI also slipped to 50.1, missing expectations and signaling a slowdown in the services sector.

These indicators suggest that China's economy is facing headwinds, with ongoing trade tensions with the United States and a slowdown in both manufacturing and services sectors. The Shanghai Composite Index has been volatile in recent months, with a seven-month high in June followed by a series of declines. The index slipped further beneath the boom-or-bust line of 50, which separates expansion from contraction, indicating a broader economic slowdown [1].

The Hang Seng Index in Hong Kong also experienced a decline, losing 1.60% to 24,773.33, reflecting the broader regional impact of China's economic slowdown [1].

Looking ahead, analysts expect the Shanghai Composite Index to trade at 3,505.25 by the end of the current quarter and at 3,252.98 in 12 months' time, according to Trading Economics global macro models and analyst expectations [2].

The upcoming Politburo meeting is expected to provide potential stimulus signals aimed at stabilizing the economy, which could influence market sentiment in the coming weeks [2].

References:
[1] https://www.business-standard.com/markets/capital-market-news/china-s-shanghai-composite-index-slides-more-than-one-percent-125073101405_1.html
[2] https://tradingeconomics.com/china/stock-market