China Bourse May Test Support At 3,900 Points

(RTTNews) - The China stock market on Tuesday ended the two-day winning streak in which it had climbed almost 50 points or 1.3 percent. The Shanghai Composite Index now sits just beneath the 3,910-point plateau and it may open under pressure again on Wednesday.

The global forecast for the Asian markets suggests little movement ahead of the FOMC rate decision later today. The European and U.S. markets were mixed and little changed and the Asian bourses are expected to follow that lead.

The SCI finished modestly lower on Tuesday following losses from the property and resource sectors, while the financial shares were mixed.

For the day, the index lost 14.56 points or 0.37 percent to finish at 3,909.52 after trading between 3,902.13 and 3,923.90. The Shenzhen Composite Index shed 12.99 points or 0.52 percent to end at 2,485.93.

Among the actives, Industrial and Commercial Bank of China jumped 1.38 percent, while Bank of China collected 0.17 percent, Agricultural Bank of China rallied 2.55 percent, China Merchants Bank fell 0.32 percent, Bank of Communications and Huaneng Power both eased 0.13 percent, China Life Insurance tumbled 1.96 percent, Jiangxi Copper crashed 6.06 percent, Aluminum Corp of China (Chalco) plummeted 6.03 percent, Yankuang Energy lost 0.67 percent, PetroChina retreated 1.32 percent, China Petroleum and Chemical (Sinopec) shed 0.50 percent, China Shenhua Energy skidded 1.03 percent, Gemdale cratered 3.09 percent, Poly Developments stumbled 2.46 percent and China Vanke tanked 2.85 percent.

The lead from Wall Street provides little clarity as the major averages opened mixed and fairly flat and stayed that way through the session.

The Dow dropped 179.03 points or 0.38 percent to finish at 47,560.29, while the NASDAQ rose 30.58 points or 0.13 percent to close at 23,576.49 and the S&P 500 eased 6.00 points or 0.09 percent to end at 6,840.51.

Traders were reluctant to make significant moves ahead of the Federal Reserve's monetary policy announcement later today. While the Fed is widely expected to lower interest rates by another quarter point, there is considerable uncertainty about the longer-term outlook for rates.

Traders are likely to pay close attention to the wording of the Fed's accompanying statement as well as Fed Chair Jerome Powell's post-meeting press conference for clues about the likelihood of further rate cuts.

On the U.S. economic front, the Labor Department said job openings in the U.S. edged slightly higher in October.

Crude oil prices slumped on Tuesday as Iraq resumed crude flow from Lukoil's West Qurna oil fields while the U.S. dollar gained ground after job data from the U.S. West Texas Intermediate crude for January delivery was down $0.66 or 1.12 percent at $58.22 per barrel.

Closer to home, China will release November numbers for consumer and producer prices later this morning. Consumer prices are expected to add 0.3 percent on month and 0.7 percent on year after rising 0.2 percent both on month and on year in October. Producer prices are tipped to fall an annual 2.0 percent after slipping 2.1 percent in the previous month.