China Stock Market May Reclaim 3,900-Point Level

(RTTNews) - The China stock market has finished lower in back-to-back sessions, contracting more than 60 points or 1.5 percent in that span. The Shanghai Composite Index now sits just beneath the 3,890-point plateau although it's likely to open to the upside on Monday.

The global forecast for the Asian markets is positive on easing oil prices and likely bargain hunting. The European and U.S. markets were up and the Asian bourses are expected to open in similar fashion.

The SCI finished sharply lower on Friday following losses among the resource, industrial and technology sectors, although the banks offered support.

For the day, the index sank 46.29 points or 1.18 percent to finish at 3,888.11 after trading between 3,852.03 and 3,912.32. The Shenzhen Composite Index declined 36.19 points or 1.45 percent to end at 2,465.85.

The lead from Wall Street is firm as the major averages opened higher and remained solidly in the green throughout the trading day.

The Dow jumped 509.19 points or 0.98 percent to finish at 52,573,29, while the NASDAQ rallied 251.31 points or 0.96 percent to close at 26,333.04 and the S&P 500 gained 65.28 points or 0.86 percent to end at 7,656.98.

Despite the rebound on the day, the major averages all moved to the downside for the holiday-shortened week. The Dow slumped by 1.6 percent, while the S&P and the NASDAQ slid by 0.8 percent and 0.7 percent, respectively.

The recovery rally on Wall Street came amid a sharp pullback by the price of crude oil, which had skyrocketed over the past few days, while bargain hunting also contributed to the upswing.

Crude oil prices slumped on Friday amid hopes of a possible reopening of the Strait of Hormuz on reports of a possible meeting between Iran and the members of the Gulf Cooperation Council to defuse the gulf crisis. West Texas Intermediate Crude for October delivery was down $2.63 or 2.57 percent at $99.85 per barrel.

Traders shrugged off the Labor Department's report on consumer price inflation in August, which was in line with forecasts. The data solidified expectations that the Federal Reserve will raise interest rates by a quarter-point this week, although it's largely already priced in.

Closer to home, China will release August figures for new loans and the M2 money stock later today. Loans are expected to increase by CNY480.0 billion after shedding CNY340.0 billion in July. M2 is called higher by an annual 7.6 percent, easing from 7.7 percent in the previous month.