Weekly Market Analysis - 3rd Week of May

Market overview:

After a long period of big economic growth, many investors are now questioning the future of China’s equity market and its economy, with some being very pessimistic of it.

Despite the fact that China’s gross domestic product (GDP) growth is slowing compared with past years, we witness the transformation of the economy from investment to consumption.

This transformation will have huge implications in many sectors of the economy.

China’s economic transition, along with the incredible economic growth we have already seen, has resulted in a much larger economy so that the percentage growth numbers will naturally limit their growing rate as we going forward.

However, that is not a negative indication. the announced and Government planned changes will not happen overnight. The significant continued urbanisation of the country, which is still behind the urbanisation rate of the United States, is moving forward and should have a vast impact in many sectors of the economy. Although we experience a slowing in China’s growth rate,  is expected to continue to outpace global growth by a wide margin.

Equities were mixed on Friday with the Euro Stoxx 50 up 0.7 %, the Dow closed off 1.05 % and Asia was generally bearish with Japan's Nikkei down 1.41 %, the Hang Seng off 1%, the CSI 300 is down 0.5 %, the ASX 200 is down 0.57 % and the Kospi is down 0.5 %.

Elsewhere in Commodities, WTI Crude Oil descended to 46.21%.

In Nickel, the Finnish government is planning to inject around 100 million euros into Talvivaara nickel mine, which would keep the mine open until the end of the year. However, a closer of the mine is an option that would be considered, as mentioned in Reuters.

In the meanwhile, Nippon Steel & Sumitomo Metal Corp., Japan’s largest steelmaker, said it will take majority control of the nation’s No. 4 mill, Nisshin Steel Co., as the industry consolidates in the face of a global supply glut. Below, the historical 1-month price graph for nickel is presented.

LME prices for non-ferrous metals in general continued their descending trend. Prices, opening stocks as well as settlement exchange rates are presented in the tables below, among with the three months chart for NAASAC.

Sources: lme, cnbc, reuters, bloomberg