Rebound Expected For China Stock Market

(RTTNews) - The China stock market has alternated between positive and negative finishes through the last six trading days since the end of the two-day slide in which it had fallen more than 40 points or 1.3 percent. The Shanghai Composite Index now rests just above the 3,015-point plateau although its tipped to move higher again on Tuesday.

The global forecast for the Asian markets is generally positive on optimism over the outlook for interest rates. The European markets were mixed and the U.S. bourses were up and the Asian markets figure to follow the latter lead.

The SCI finished modestly lower on Monday following losses from the financial shares, property stocks and resource companies.

For the day, the index sank 16.74 points or 0.55 percent to finish at 3,015.89 after trading between 3,012.05 and 3,026.62.

Among the actives, Industrial and Commercial Bank of China retreated 1.27 percent, while Agricultural Bank of China tumbled 1.88 percent, China Construction Bank sank 0.84 percent, Bank of Communications climbed 1.03 percent, China Life dipped 0.19 percent, Ping An Insurance shed 0.69 percent, Jiangxi Copper tanked 2.22 percent, Aluminum Corporation of China plunged 3.10 percent, PetroChina stumbled 1.83 percent, China Petroleum & Chemical surrendered 2.60 percent, China Shenhua Energy declined 1.83 percent, Gemdale plummeted 4.47 percent and Poly Development slumped 2.00 percent.

The lead from Wall Street is upbeat as the major averages opened lower on Monday but quickly turned higher and finished solidly in the green.

The Dow jumped 188.94 points or 0.49 percent to finish at 38,778.10, while the NASDAQ rallied 168.14 points or 0.95 percent to close at 17,857.02 and the S&P 500 gained 41.63 points or 0.77 percent to end at 5,473.23.

The buying interest that emerged on Wall Street came as the markets benefitted from the positive sentiment generated last week by tamer-than-expected inflation data.

While Federal Reserve officials forecast just one interest rate cut this year following last Wednesday's monetary policy meeting, traders remain hopeful the predictions will turn out to be overly conservative if inflation continues to slow in the coming months.

On the U.S. economic front, the Federal Reserve Bank of New York released a report this morning showing New York manufacturing activity contracted at a notably slower rate in June.

Oil prices rose to a fresh six-week high on Monday on hopes about the outlook for energy demand. West Texas Intermediate crude oil futures for July ended higher by $1.88 or about 1.25 percent at $80.33 a barrel, the highest settlement since April 29.