Continued Consolidation Called For China Stock Market

(RTTNews) - The China stock market on Wednesday halted the three-day winning streak in which it had improved more than 60 points or 1.9 percent. The Shanghai Composite Index now sits just above the 3,220-point plateau and it's likely to open under pressure again on Thursday.

The global forecast for the Asian markets is negative on pessimism over the outlook for interest rates. The European and U.S. markets were down and the Asian bourses are expected to open in similar fashion.

The SCI finished modestly lower on Wednesday as losses from the financials and properties were tempered by gains from the resource companies.

For the day, the index declined 22.40 points or 0.69 percent to finish at 3,222.95 after trading between 3,218.60 and 3,241.84. The Shenzhen Composite Index sank 17.30 points or 0.84 percent to end at 2,051.52.

Among the actives, Industrial and Commercial Bank of China dipped 0.21 percent, while China Construction Bank fell 0.32 percent, China Merchants Bank retreated 1.43 percent, Bank of Communications lost 0.34 percent, China Life Insurance skidded 1.06 percent, Jiangxi Copper advanced 0.99 percent, Aluminum Corp of China (Chalco) rallied 2.85 percent, Yankuang Energy soared 3.13 percent, China Petroleum and Chemical (Sinopec) slid 0.31 percent, Huaneng Power gained 0.75 percent, China Shenhua Energy climbed 1.02 percent, Gemdale shed 0.42 percent, Poly Developments sank 0.63 percent, China Vanke slumped 0.36 percent, China Fortune Land improved 0.45 percent and Bank of China, PetroChina and Beijing Capital Development were unchanged.

The lead from Wall Street is weak as the major averages opened lower on Wednesday and largely spent the day in the red, ending near session lows.

The Dow dropped 129.83 points or 0.38 percent to finish at 34,288.64, while the NASDAQ sank 25.12 points or 0.18 percent to close at 13,791.65 and the S&P 500 fell 8.77 points or 0.20 percent to end at 4,446.82.

The selling pressure came ahead of, and in response to, the latest batch of FOMC minutes which suggested a more hawkish tone for the outlook on interest rates than had been hoped.

The minutes also showed the members disagreed on rate hikes. After the June meeting, all but two of the 18 participants expected that at least one hike would be appropriate this year, and 12 expected two or more hikes.

In economic news, the Commerce Department released a report showing new orders for U.S. manufactured goods increased by much less than expected in May.

Crude oil futures settled sharply higher on Wednesday, buoyed by government data showing a significant jump in U.S. crude shipments last week. West Texas Intermediate Crude oil futures for August ended higher by $2.00 or 2.9 percent at $71.79 a barrel.