How the Shanghai Stock Exchange Composite tracks commodity cycles — and what it signals for Chinese cyclical stocks.
The SSE Composite Index is dominated by state-owned enterprises in energy, materials and financials — sectors that move directly with commodity prices. When Brent rises, PetroChina and CNOOC lift the index. When copper sells off, Jiangxi Copper and Chalco drag it lower.
The Caixin Manufacturing PMI is the single most watched leading indicator for SSE cyclicals. A PMI above 52 has historically preceded strong 3-6 month returns in Shanghai energy and materials names. At 51.4, the current reading is marginally expansionary.