China Stock Market May Extend Wednesday's Losses

(RTTNews) - The China stock market on Wednesday snapped the two-day winning streak in which it had gathered almost 50 points or 1.6 percent. The Shanghai Composite Index now rests just shy of the 3,090-point plateau and it may take further damage on Thursday.

The global forecast for the Asian markets is soft amid concerns over the health of the world economy and the outlook for interest rates. The European markets were mixed and the U.S. bourses were down and the Asian markets figure to follow the latter lead.

The SCI finished slightly lower on Wednesday following mixed performances from the resource and energy companies, while the financials offered support.

For the day, the index slipped 8.17 points or 0.26 percent to finish at 3,087.40 after trading between 3,079.43 and 3,098.65. The Shenzhen Composite Index dropped 19.00 points or 0.95 percent to end at 1,974.33.

Among the actives, Industrial and Commercial Bank of China collected 0.47 percent, while Bank of China and China Shenhua Energy both rose 0.32 percent, China Construction Bank added 0.54 percent, China Merchants Bank jumped 1.80 percent, Bank of Communications advanced 0.85 percent, China Life Insurance perked 0.14 percent, Jiangxi Copper strengthened 1.67 percent, Aluminum Corp of China (Chalco) dipped 0.22 percent, Yankuang Energy dropped 0.94 percent, PetroChina improved 0.80 percent, China Petroleum and Chemical (Sinopec) climbed 1.14 percent, Huaneng Power skyrocketed 7.35 percent, Gemdale gained 0.97 percent, Poly Developments gathered 0.72 percent, China Vanke was up 0.38 percent, China Fortune Land sank 0.79 percent and China Minsheng Bank was unchanged.

The lead from Wall Street is negative as the major averages shook off a slightly higher open on Wednesday, quickly heading south and finishing firmly in the red.

The Dow tumbled 365.85 points or 1.10 percent to finish at 32,875.71, while the NASDAQ slumped 139.94 points or 1.35 percent to close at 10,213.29 and the S&P 500 sank 46.03 points or 1.20 percent to end at 3,783.22.

The weakness that emerged on Wall Street partly reflected ongoing concerns about the economic outlook and the possibility of higher interest rates leading to a recession.

However, with many traders away from their desks amid the holidays, the sell-off on Wall Street may have been exaggerated by below average volume.

In economic news, the National Association of Realtors reported a continued slump in U.S. pending home sales in November.

Crude oil prices dropped Wednesday on concerns about the outlook for energy demand amid fears of a global recession and rising COVID-19 cases in China. West Texas Intermediate Crude oil futures for February ended down $0.57 or 0.7 percent at $78.86 a barrel.