China Stock Market May Challenge 3,700-Point Level

(RTTNews) - The China stock market has moved higher in three straight sessions, collecting almost 50 points or 1.4 percent along the way. The Shanghai Composite Index now sits just above the 3,680-point plateau and it may extend its gains again on Thursday.

The global forecast for the Asian markets is positive on continued optimism over the outlook for interest rates. The European and U.S. markets were up and the Asian bourses are expected to at least open in similar fashion, although profit taking may be in order later in the day.

The SCI finished modestly higher on Wednesday as gains from the resource stocks were capped by weakness from the financial shares and properties.

For the day, the index added 17.55 points or 0.48 percent to finish at 3,683.46 after trading between 3,666.55 and 3,688.63. The Shenzhen Composite Index gained 29.98 points or 1.33 percent to end at 2,289.10.

Among the actives, Industrial and Commercial Bank of China retreated 1.03 percent, while Agricultural Bank of China declined 0.73 percent, China Merchants Bank slumped 1.05 percent, China Life Insurance lost 0.66 percent, Jiangxi Copper rallied 3.66 percent, Aluminum Corp of China (Chalco) jumped 1.84 percent, Yankuang Energy skidded 1.19 percent, PetroChina and Huaneng Power both sank 0.68 percent, China Petroleum and Chemical (Sinopec) shed 0.69 percent, Gemdale and Poly Developments both fell 0.25 percent, China Vanke eased 0.15 percent and China Shenhua Energy was unchanged.

The lead from Wall Street is upbeat as the major averages opened higher on Wednesday and largely spent the day in positive territory.

The Dow surged 463.66 points or 1.04 percent to finish at 44,922.27, while the NASDAQ added 31.24 points or 0.14 percent to close at a record 21,713.14 and the S&P 500 rose 20.82 points or 0.32 percent to end at 6,466.58, also a record.

The early strength on Wall Street came as stocks continued to benefit from optimism about an interest rate cut by the Federal Reserve following Tuesday's consumer price inflation data.

With the consumer price inflation data largely coming in line with economist estimates, the Fed is widely expected to lower rates by a least a quarter point next month.

CME Group's FedWatch Tool is currently indicating a 93.8 percent chance the Fed will cut rates by 25 basis points in September.

Crude oil prices fell on Wednesday after the International Energy Agency projected oversupply in the market this year due to surging supply from oil producers. West Texas Intermediate crude for September delivery was down $0.55 or 0.87 percent at $62.62 per barrel.