Returning from the week-long Lunar New Year holiday, the China stock market on Monday snapped the two-day winning streak in which it had gathered more than 50 points or 2.1 percent. The Shanghai Composite settled just above the 2,285-point plateau, and now analysts are predicting continued contraction at the opening of trade on Tuesday.
The global forecast for the Asian markets suggests consolidation following continued concerns over the Greek debt problem, although bargain hunting may provide support later in the day. Steel stocks figure to fall under pressure, along with properties and technology shares. The European and U.S. markets finished firmly in the red, and the Asian markets are expected to open in similar fashion.
The SCI finished sharply lower on Monday following losses from the financial shares and property stocks.
For the day, the index plunged 34.08 points or 1.47 percent to finish at 2285.04 after trading between 2,284.29 and 2,324.49. The Shenzhen Composite Index dropped 6.06 points or 0.7 percent to end at 855.09.
Among the decliners, Poly Real Estate Group shed 4.7 percent, while China Vanke lost 4.4 percent, Gemdale Corp. fell 3.3 percent, China Construction Bank retreated 2.9 percent, Bank of Nanjing dropped 2.4 percent and China Merchants Bank was off 2.3 percent.
The lead from Wall Street is modestly negative as stocks showed a substantial recovery on Monday after moving sharply lower in early trading. Stocks still finished in the red amid renewed concerns that the financial situation in Europe could lead to recession and its potential impact on the global economy.
Adding to the worries about Europe, Greek Finance Minister Evangelos Venizelos angrily rejected a German plan for the euro zone to impose a budget overseer on Greece in return for a new 130 billion euro bailout. Venizelos said the proposal would improperly force his country to choose between "financial assistance" and "national dignity." The report came as European leaders held a summit in Brussels regarding a permanent rescue fund for the euro zone.
Traders also reacted negatively to a report from the U.S. Commerce Department showing that personal spending came in nearly unchanged in December despite a notable increase in personal income. Personal income rose by 0.5 percent in December, although personal spending edged down by less than 0.1 percent. The savings rate reached a four-month high of 4.0 percent.
Selling pressure waned not long after the open, however, and stocks subsequently climbed well off their worst levels of the day. The rebound reflected the recent upward trend for the markets.
Among individual stocks, shares of Gannett (GCI) came under pressure on the day after the newspaper publisher reported a notable drop in advertising revenue at its newspaper division. Meanwhile, Thomas & Betts (TNB) moved sharply higher after the electrical components maker agreed to be acquired by Swiss engineering giant ABB Ltd. (ABB) for $3.9 billion in cash.
The major averages climbed well off their worst levels of the day but finished the day modestly below the unchanged line. The Dow edged down 6.74 points or 0.1 percent to finish at 12,653.72, while the NASDAQ slipped 4.61 points or 0.2 percent to 2,811.94 and the S&P 500 dropped 3.31 points or 0.3 percent to 1,313.02.
For comments and feedback contact: editorial@rttnews.com
Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.