Renewed Selling Pressure Likely For China Stock Market

(RTTNews) - The China stock market has alternated between positive and negative finishes through the last five trading days since the end of the three-day slide in which it had fallen more than 30 points or 1 percent. The Shanghai Composite Index now sits just beneath the 3,060-point plateau although it figures to head south again on Tuesday.

The global forecast for the Asian markets suggests consolidation on rising concerns over the outlook for interest rates. The European markets were mixed and the U.S. bourses were down and the Asian markets figure to follow the latter lead.

The SCI finished sharply higher on Monday following gains from the financial shares, property stocks and resource and energy companies.

For the day, the index climbed 37.90 points or 1.26 percent to finish at 3,057.38 after trading between 2,995.54 and 3,066.94. The Shenzhen Composite Index slipped 5.04 points or 0.30 percent to end at 1,702.68.

Among the actives, Industrial and Commercial Bank of China jumped 1.88 percent, while Bank of China soared 2.23 percent, China Construction Bank collected 1.56 percent, China Merchants Bank spiked 2.21 percent, Bank of Communications accelerated 1.98 percent, China Life Insurance surged 3.73 percent, Jiangxi Copper rallied 2.20 percent, Aluminum Corp of China (Chalco) improved 2.16 percent, Yankuang Energy strengthened 2.49 percent, PetroChina climbed 3.89 percent, China Petroleum and Chemical (Sinopec) skyrocketed 4.23 percent, Huaneng Power rose 0.40 percent, China Shenhua Energy advanced 3.32 percent, Poly Developments perked 0.38 percent, China Vanke gained 0.56 percent and Gemdale was unchanged.

The lead from Wall Street is broadly negative as the major averages opened higher on Monday but quickly head south and finished deep in the red.

The Dow dropped 248.13 points or 0.65 percent to finish at 37,735.11, while the NASDAQ tumbled 290.08 points or 1.79 percent to close at 15,885.02 and the S&P 500 sank 61.59 points or 1.20 percent to end at 5,061.82.

The initial strength on Wall Street reflected a positive reaction to earnings news from Goldman Sachs (GS) as the investment banking company reported Q1 earnings that exceeded estimates on better than expected revenues.

Traders also initially reacted positively to a Commerce Department report showing much stronger than expected U.S. retail sales growth in March - but the data triggered another spike by treasury yields.

The yield on the benchmark 10-year note has surged to its highest levels in five months, as the data has led to renewed concerns about the outlook for interest rates.

Crude oil prices fell on Monday amid slightly easing concerns about supply disruptions after Iran's drone and missile attack on Israel did not cause any big damage. Concerns about the outlook for oil demand in China and a strong U.S. dollar also weighed on oil prices. West Texas Intermediate Crude futures for May ended lower by $0.25 at $85.41 a barrel.

Closer to home, China is scheduled to release a batch of data later this morning, including Q1 figures for gross domestic product March numbers for industrial production, retail sales, fixed asset investment, unemployment and house prices.

GDP is expected to rise 0.8 percent on quarter and 4.8 percent on year, slowing from 1.0 percent on quarter and 5.2 percent on year in the previous three months. The jobless rate is expected to ease to 5.2 percent from 5.3 percent in February. House prices are seen lower by 1.2 percent on year after falling 1.4 percent a month earlier.

Industrial production is tipped to gain 5.4 percent on year, easing from 7.0 percent in February, while retail sales are expected to gain an annual 5.1 percent - down from 5.5 percent a month earlier. Fixed asset investment is seen higher by 4.3 percent on year, up from 4.2 percent in the previous month.

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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