Renewed Selling Pressure Anticipated For China Stocks

(RTTNews) - The China stock market ticked higher again on Wednesday, one day after ending the three-day winning streak in which it had collected almost 30 points or 0.9 percent. The Shanghai Composite Index now rests just beneath the 3,200-point plateau although it's likely to head south again on Thursday.

The global forecast for the Asian markets is soft on nervousness over the outlook for interest rates. The European markets were down and the U.S. bourses were mixed and the Asian markets figure to split the difference.

The SCI finished barely higher on Wednesday as gains from the financials and properties were offset by weakness from the resource and energy stocks.

For the day, the index was up 2.42 point or 0.08 percent to finish at 3,197.76 after trading between 3,188.01 and 3,210.33. The Shenzhen Composite Index slipped 3.34 points or 0.17 percent to end at 1,995.28.

Among the actives, Industrial and Commercial Bank of China climbed 1.01 percent, while Bank of China strengthened 1.25 percent, China Construction Bank jumped 1.54 percent, China Merchants Bank improved 0.70 percent, Bank of Communications collected 0.68 percent, China Life Insurance added 0.53 percent, Jiangxi Copper fell 0.27 percent, Aluminum Corp of China (Chalco) dipped 0.18 percent, Yankuang Energy dropped 0.97 percent, China Petroleum and Chemical (Sinopec) eased 0.15 percent, Huaneng Power retreated 1.27 percent, China Shenhua Energy perked 0.03 percent, Gemdale spiked 1.87 percent, Poly Developments gained 0.96 percent, China Vanke accelerated 1.11 percent, China Fortune Land rallied 1.73 percent and PetroChina was unchanged.

The lead from Wall Street offers little clarity as the major averages opened higher on Wednesday; the Dow kept bouncing up and down but finished in the green, while the NASDAQ and S&P quickly headed south and remained in the red.

The Dow added 94.93 points or 0.28 percent to finish at 33,668.21, while the NASDAQ dropped 168.22 points or 1.27 percent to end at 13,108.19 and the S&P 500 sank 15.82 points or 0.37 percent to close at 4,268.03.

The sharp pullback by the NASDAQ came after the Bank of Canada once again raised interest rates after leaving rates unchanged for two straight meetings, raising the concerns about the outlook for U.S. rates.

The Federal Reserve is scheduled to announce its latest monetary policy decision next Wednesday, with the central bank widely expected to leave interest rates unchanged.

In U.S. economic news, the Commerce Department said the U.S. trade deficit widened significantly in April as the value of exports plummeted.

Crude oil prices climbed higher on Wednesday as Saudi Arabia's recent decision to cut crude output outweighed concerns about demand, while data showing a drop in U.S. crude inventories last week also supported prices. West Texas Intermediate Crude oil futures for July ended higher by $0.79 or 1.1 percent at $72.53 a barrel.

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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