Renewed Selling Pressure Likely For China Shares

(RTTNews) - The China stock market has moved higher in two of three trading days since the end of the four-day slide in which it had stumbled more than 75 points or 2.5 percent. The Shanghai Composite Index now sits just above the 2,970-point plateau although it figures to head south again on Friday.

The global forecast for the Asian markets suggests profit taking, particularly among the technology sectors. The European markets were up and the U.S. bourses were down and the Asian markets figure to follow the latter lead.

The SCI finished sharply higher on Thursday following gains from the resource stocks and properties.

For the day, the index improved 31.02 points or 1.06 percent to finish at 2,970.39 after trading between 2,947.40 and 2,971.36. The Shenzhen Composite Index jumped 37.24 points or 2.35 percent to end at 1,619.82.

Among the actives, Industrial and Commercial Bank of China slumped 1.17 percent, while Bank of China skidded 1.05 percent, China Construction Bank shed 0.65 percent, China Merchants Bank collected 0.58 percent, Bank of Communications lost 0.41 percent, China Life Insurance perked 0.03 percent, Jiangxi Copper surged 4.51 percent, Aluminum Corp of China (Chalco) soared 3.17 percent, Yankuang Energy rose 0.07 percent, PetroChina strengthened 1.26 percent, Huaneng Power tumbled 1.97 percent, China Shenhua Energy dipped 0.07 percent, Gemdale rallied 1.58 percent, Poly Developments jumped 2.00 percent, China Vanke spiked 2.41 percent and China Petroleum and Chemical (Sinopec) was unchanged.

The lead from Wall Street is largely negative as the major averages opened lower on Thursday; the Dow inched barely into the green, while the S&P and NASDAQ retreated from record highs.

The Dow rose 32.39 points or 0.08 percent to finish at 39,753.75, while the NASDAQ plummeted 364.04 points or 1.95 percent to close at 18,283.41 and the S&P 500 sank 49.37 points or 0.88 percent to end at 5,584.54.

Optimism about the outlook for interest rates contributed to early strength on Wall Street, although it quickly waned as traders seem to have already priced in a rate cut in September.

The subsequent sell-off came as traders cashed in on the recent strength in the markets, with some of the biggest tech winners of the year like AI darling Nvidia (NVDA) leading the pullback.

Nonetheless, the Federal Reserve is still seen as likely to lower rates in September after a report from the Labor Department showing showed prices in the U.S. unexpectedly edged slightly lower in June.

Oil futures settled higher on Thursday, lifted by hopes of an interest rate cut by the Federal Reserve after the encouraging inflation data. West Texas Intermediate Crude oil futures for August ended down $0.52 at $82.62 a barrel.

Closer to home, China will release June figures for imports, exports and trade balance later today. Imports are expected to add 2.8 percent on year, up from 1.8 percent in May. Exports are called higher by an annual 8.0 percent, up from 7.6 percent in the previous month. The trade surplus is pegged at $85.00 billion, up from $82.62 billion a month earlier.