• The Shanghai Composite index rose by 7.1 points or 0.22% on Monday, ending a three-session decline, driven by expectations of further support measures from Beijing following disappointing inflation data in China for June.

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• Consumer prices in China remained stagnant in June, while factory-gate prices experienced their ninth consecutive month of decline.
• Traders expressed optimism that the regulatory scrutiny of the mainland’s fintech sector may conclude soon, after Chinese regulators issued a hefty CNY 7.12 billion fine for Ant Group on Friday.
• Treasury Secretary Yellen’s discussions with Chinese officials in Beijing were seen as making progress in strengthening ties between the US and China.
• Despite the positive momentum, gains on the Shanghai Composite were limited due to a notable drop in US futures, as caution prevailed ahead of US inflation data scheduled for release during the week.

The Shanghai Composite index appears to be trading below the Year’s developing value area within a balanced price range, as traders rely on extreme levels to determine rotational scenarios. The market encountered selling pressure around the Year’s lower value extreme (DVAL), while market participants seemed to express buying interest around the lower extreme of the aforementioned balanced price range.

The intraday perspective exhibited rotational behavior, with the market finding support around the lower extreme of the developing value area and the previous value area high close level, serving as potential trading levels for buyers. The previous volume-weighted average price (VWAP) close level provided support at the opening, leading to a rotational surge in the market.

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