China Stock Market May Extend Monday's Losses

(RTTNews) - The China stock market has finished lower in two of three trading days since the end of the four-day winning streak in which it had gathered more than 80 points or 2.6 percent. The Shanghai Composite Index now sits just above the 3,255-point and it may take further damage on Tuesday.

The global forecast for the Asian markets is broadly negative on fears of n economic slowdown and concerns over the outlook for interest rates. The European and U.S. markets were sharply lower and the Asian markets are expected to follow that lead.

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

For the day, the index sank 29.28 points or 0.89 percent to finish at 3,255.55 after trading between 3,229.31 and 3,272.99. The Shenzhen Composite Index dipped 0.21 points to end at 2,085.10.

Among the actives, Industrial and Commercial Bank of China shed 0.43 percent, while Bank of China lost 0.62 percent, China Construction Bank fell 0.67 percent, China Merchants Bank plunged 3.86 percent, Bank of Communications tumbled 2.00 percent, China Life Insurance tanked 2.03 percent, Jiangxi Copper retreated 1.33 percent, Aluminum Corp of China (Chalco) declined 1.36 percent, Yankuang Energy stumbled 1.66 percent, China Petroleum and Chemical (Sinopec) slumped 1.42 percent, Huaneng Power plummeted 6.01 percent, China Shenhua Energy surrendered 3.10 percent, Gemdale cratered 4.17 percent, Poly Developments weakened 4.51 percent, China Vanke dropped 2.18 percent, China Fortune Land sank 0.95 percent and PetroChina was unchanged.

The lead from Wall Street is brutal as the major averages opened sharply lower on Monday and only got worse as the day progressed, ending deep in the red.

The Dow plummeted 876.05 points or 2.79 percent to finish at 30,516 billion baht, while the NASDAQ plunged 530.80 points or 4.68 percent to close at 10,809.23 and the S&P 500 dropped 151.23 points or 3.88 percent to close at 3,749.63.

The extended sell-off on Wall Street reflected lingering concerns about inflation and the outlook for interest rates after last Friday's report showing a jump in consumer prices.

The Federal Reserve is scheduled to announce its latest monetary policy decision on Wednesday, with the central bank expected to continuing raising interest rates in an effort to combat inflation.

While the Fed's rate hikes have been widely anticipated for months, traders seem increasingly concerned tighter monetary policy could trigger a period of stagflation or an outright recession.

Crude oil futures rebounded from early losses and settled modestly higher on Monday as concerns about global supplies outweighed demand worries. West Texas Intermediate Crude oil futures for July ended higher by $0.26 or 0.2 percent at $120.93 a barrel.

Closer to home, China will see May numbers for foreign direct investment; in April, FDI surged 20.5 percent on year.