China Stock Market May Take Further Damage On Tuesday

(RTTNews) - The China stock market headed south again on Monday, one session after it had ended the two-day losing streak in which it had retreated almost 30 points or 1 percent. The Shanghai Composite Index now sits just above the 3,310-point plateau and the losses may accelerate on Tuesday.

The global forecast for the Asian markets is soft on doubts for stimulus to combat the rising number of coronavirus cases. The European and U.S. markets were down and the Asian bourses are expected to follow suit.

The SCI finished modestly lower on Monday as losses from the energy producers were mitigated by support from the financials and mixed performances from the insurance stocks and properties.

For the day, the index lost 23.69 points or 0.71 percent to finish at 3,312.67 after trading between 3,307.84 and 3,371.09. The Shenzhen Composite Index shed 15.91 points or 0.70 percent to end at 2,249.53.

Among the actives, Industrial and Commercial Bank of China collected 0.60 percent, while Bank of China rose 0.31 percent, China Construction Bank jumped 1.87 percent, China Merchants Bank added 0.53 percent, Bank of Communications fell 0.22 percent, China Life Insurance gained 0.75 percent, Ping An Insurance eased 0.18 percent, China Petroleum and Chemical (Sinopec) slid 0.25 percent, China Shenhua Energy skidded 1.06 percent, Gemdale advanced 0.91 percent, Poly Developments gathered 0.49 percent, China Vanke shed 0.43 percent, Beijing Capital Development lost 0.45 percent and PetroChina was unchanged.

The lead from Wall Street is broadly negative as stocks showed a lack of direction early in Monday's trade but headed firmly south as the day progressed.

The Dow tumbled 410.89 points or 1.44 percent to finish at 28,195.42, while the NASDAQ sank 192.67 points or 1.65 percent to close at 11,478.88 and the S&P 500 dropped 56.89 points or 1.63 percent to end at 3,426.92.

The weakness on Wall Street reflected concerns about whether lawmakers in Washington will reach an agreement on a new stimulus bill, with reports suggesting there remains an array of additional differences that must be addressed in a comprehensive manner in the next 48 hours.

In economic news, the National Association of Homebuilders said that homebuilder confidence climbed to a fresh record high in October versus expectations for no change.

Crude oil futures ended slightly lower on Monday, weighed down by lingering concerns about energy demand outlook due to rising coronavirus cases. West Texas Intermediate crude oil futures for November ended at $40.83 a barrel, down $0.05 or 0.1 percent at $40.83 a barrel.

Closer to home, China will release September figures for house prices later today. In August, prices were up 4.8 percent on year, while the one-year prime rate was 3.85 percent and the five-year prime rate was 4.65 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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