Shanghai Stock Market Focuses on China's April Trade Balance and CPI Indicators

Despite initially holding up well after entering a tariff war with the United States, the Chinese stock market is once again shrinking. Concerns are arising that the real economy is visibly impacted by the tariff war, as manufacturing indicators have entered a contraction phase for the first time in two months.

Ahead of the Chinese Labor Day holiday (May 1-5), the mainland stock market closed weak on April 30. The Shanghai Composite Index finished trading at 3279.03, down 0.23% from the previous trading day. Despite observations that the intensity of the US-China tariff war has recently eased, investors are increasingly focusing on the tangible impacts on the real economy.

Recent indicators show that China's manufacturing economy has fallen to its lowest point in 16 months. In April, China's Manufacturing Purchasing Managers' Index (PMI) also fell below the baseline (50) to 49 due to a sharp decline in export orders.

When the Chinese stock market reopens on the 6th after the holiday, it is likely to react sensitively to economic indicators. First, the scale of new loans and the growth of loan balances for the previous month will be announced on the 9th.

Investors are also paying attention to the April trade balance, which will be released on the 10th. This will be the first time China's export and import performance is revealed since the US imposed high tariffs on China. In March, China's exports rebounded sharply (up 12.4% year-on-year), far exceeding market expectations, due to a rush to ship goods before tariffs took effect. The Consumer Price Index (CPI) for April will also be announced on the same day.

Beijing Correspondent Kim Eun-jung kej@hankyung.com