China Stock Market May Reverse Wednesday's Losses

(RTTNews) - The China stock market on Wednesday ended the three-day winning streak in which it had gathered more than 50 points or 1.8 percent. The Shanghai Composite Index now sits just above the 2,980-point plateau although it's expected to find renewed strength on Thursday.

The global forecast for the Asian markets is firm on an improved outlook for interest rates. The European markets were up and the U.S. bourses were mixed and the Asian markets figure to split the difference.

The SCI finished modestly lower on Wednesday as losses from the financial shares and resource stocks were mitigated by support from the property sector.

For the day, the index sank 14.63 points or 0.49 percent to finish at 2,982.38 after trading between 2,978.07 and 2,998.54. The Shenzhen Composite Index lost 12.68 points or 0.78 percent to end at 1,608.06.

Among the actives, Industrial and Commercial Bank of China retreated 1.34 percent, while Bank of China skidded 1.05 percent, China Construction Bank slumped 1.17 percent, China Merchants Bank stumbled 1.77 percent, Bank of Communications dipped 0.26 percent, China Life Insurance perked 0.03 percent, Jiangxi Copper rose 0.13 percent, Aluminum Corp of China (Chalco) tumbled 1.67 percent, Yankuang Energy fell 0.38 percent, PetroChina dropped 0.84 percent, China Petroleum and Chemical (Sinopec) slid 0.31 percent, Huaneng Power lost 0.41 percent, China Shenhua Energy weakened 1.20 percent, Gemdale advanced 0.85 percent, Poly Developments climbed 1.00 percent and China Vanke added 0.42 percent.

The lead from Wall Street is inconsistent as the major averages opened slightly higher on Wednesday and hugged the line for the first half of the day before diverging to finish mixed.

The Dow dipped 23.90 points or 0.06 percent to finish at 39,308.00, while the NASDAQ gained 159.54 points or 0.88 percent to end at a record 18,188.30 and the S&P 500 added 28.01 points or 0.51 percent to close at 5,537.02 - also a record.

The strength on Wall Street reflected optimism about the outlook for interest rates following the release of weaker than expected economic data.

The Institute for Supply Management showed an unexpected contraction by U.S. service sector activity in June. Also, the Labor Department noted a modest increase by first-time claims for U.S. unemployment benefits last week.

However, overall trading activity remained somewhat subdued and treasuries moved notably higher in reaction to the weaker than expected data. The markets closed earlier than usual and remain closed for the Independence Day holiday on Thursday.

Oil prices climbed higher on Wednesday after data showed a much larger than expected drop in U.S. crude inventories last week, while a weaker dollar also lent support. West Texas Intermediate Crude oil futures for August ended up by $1.07 at $83.88 a barrel.