Renewed Support Predicted For China Stock Market

(RTTNews) - The China stock market on Tuesday snapped the three-day winning streak in which it had climbed more than 50 points or 1.8 percent. The Shanghai Composite Index now sits just beneath the 3,160-point plateau although it's tipped to open in the green again on Wednesday.

The global forecast is murky amid a lack of true catalysts. The European markets were soft and the U.S. bourses were up and the Asian markets figure to follow the latter lead.

The SCI finished modestly lower on Tuesday as losses from the oil and resource stocks were mitigated by support from the properties and a mixed picture from the financial sector.

For the day, the index shed 13.18 points or 0.42 percent to finish at 3,157.97 after trading between 3,148.34 and 3,165.22. The Shenzhen Composite Index sank 13.48 points or 0.75 percent to end at 1,780.50.

Among the actives, Industrial and Commercial Bank of China collected 0.73 percent, while Bank of China advanced 0.89 percent, China Construction Bank rose 0.42 percent, China Merchants Bank fell 0.38 percent, Bank of Communications added 0.72 percent, China Life Insurance slid 0.30 percent, Jiangxi Copper plunged 3.60 percent, Aluminum Corp of China (Chalco) dropped 0.86 percent, Yankuang Energy gained 0.64 percent, PetroChina, China Petroleum and Chemical (Sinopec) and Huaneng Power all sank 0.78 percent, China Shenhua Energy rallied 2.54 percent, Gemdale surged 4.99 percent, Poly Developments climbed 0.99 percent and China Vanke perked 0.11 percent.

The lead from Wall Street is cautiously optimistic as the major averages opened lower but gradually picked up steam as the day progressed and ended with mild gains.

The Dow added 66.22 points or 0.17 percent to finish at 39,872.99, while the NASDAQ gained 37.75 points or 0.22 percent to close at a record 16,832.62 and the S&P 500 rose 13.28 points or 0.25 percent to end at a record 5,321.41.

The lackluster performance on Wall Street came on renewed confidence the Federal Reserve will lower interest rates in the coming months, although recent comments from Fed officials have once again created some uncertainty.

While the likelihood rates will be lower by September remains high, the chances have fallen to 78.3 percent from close to 90 percent last week, according to CME Group's FedWatch Tool.

Another quiet day on the U.S. economic front may also have kept some traders on the sidelines ahead of the release of the minutes of the Fed's latest monetary policy meeting later today.

Oil prices fell on Tuesday, slumping for a second straight session amid concerns that the central bank might keep rates higher for a longer period. West Texas Intermediate Crude oil futures for June dropped to around $79.06 a barrel, down 0.74 or 0.93 percent.