China Stock Market May Hand Back Monday's Gains

(RTTNews) - The China stock market moved higher again on Monday, one session after ending the three-day winning streak in which it had advanced more than 85 points or 2.8 percent. The Shanghai Composite Index now rests just above the 3,210-point plateau although it's predicted to open under pressure again on Tuesday. The global forecast for the Asian markets is soft on concerns for the economy and for the outlook for interest rates. The European markets were mixed and the U.S. bourses were firmly in the red and the Asian markets are tipped to follow the latter lead.

The SCI finished sharply higher on Monday following gains from the financial shares, property stocks and resource companies. For the day, the index jumped 55.67 points or 1.76 percent to finish at 3,211.81 after trading between 3,177.06 and 3,213.44. Among the actives, Industrial and Commercial Bank of China strengthened 1.42 percent, while Bank of China jumped 1.61 percent, China Construction Bank rallied 2.74 percent, China Merchants Bank soared 4.97 percent, Bank of Communications collected 1.28 percent, China Life Insurance surged 5.10 percent, Jiangxi Copper spiked 3.47 percent, Aluminum Corp of China (Chalco) skyrocketed 9.91 percent, Yankuang Energy advanced 0.97 percent, PetroChina increased 2.31 percent, China Petroleum and Chemical (Sinopec) improved 2.67 percent, Huaneng Power accelerated 3.43 percent, China Shenhua Energy climbed 1.50 percent, Gemdale added 0.71 percent, Poly Developments gained 0.93 percent and China Vanke was up 2.88 percent.

The lead from Wall Street is negative as the major averages opened modestly lower and the losses accelerated as the day progressed, ending near session lows.

The Dow tumbled 482.78 points or 1.40 percent to finish at 33,947.10, while the NASDAQ slumped 221.56 points or 1.93 percent to close at 11,239.94 and the S&P 500 sank 72.86 points or 1.79 percent to end at 3,998.84.

The weakness on Wall Street reflected lingering uncertainty about the outlook for interest rates following last Friday's stronger-than-expected jobs data.

While the Federal Reserve is widely expected to slow the pace of interest rate hikes next week, continued labor market tightness and elevated inflation may still lead the central bank to raise rates higher than currently anticipated. A drop in treasuries compounded the uncertainty.

Adding to the worries about where rates will peak, the Institute for Supply Management said that U.S. service sector activity unexpectedly accelerated in November.

Oil prices fell on Monday as strong U.S. service data raised the prospects for more aggressive moves by the Federal Reserve. West Texas Intermediate Crude futures for January ended lower by $3.05 or 3.8 percent at $76.93 a barrel.