Continued Consolidation Called For China Stock Market

(RTTNews) - The China stock market on Friday snapped the two-day winning streak in which it had advanced more than 30 points or 1 percent. The Shanghai Composite Index now rests just shy of the 3,090-point plateau and it's likely to open in the red again on Monday.

The global forecast for the Asian markets is soft on inflation worries and geopolitical concerns. The European markets were down and the U.S. bourses were mixed and the Asian markets figure to split the difference.

The SCI finished modestly lower on Friday as losses from the resource and property stocks were mitigated by support from the financial sector.

For the day, the index lost 19.80 points or 0.64 percent to finish at 3,088.10 after trading between 3,080.55 and 3,094.92. The Shenzhen Composite Index sank 15.16 points or 0.79 percent to end at 1,905.41.

Among the actives, Industrial and Commercial Bank of China climbed 1.03 percent, while Bank of China rallied 2.06 percent, China Construction Bank soared 3.23 percent, China Merchants Bank retreated 1.39 percent, Bank of Communications collected 0.68 percent, China Life Insurance skidded 1.00 percent, Jiangxi Copper declined 1.43 percent, Aluminum Corp of China (Chalco) plunged 3.02 percent, Yankuang Energy improved 0.76 percent, China Petroleum and Chemical (Sinopec) added 0.52 percent, Huaneng Power tumbled 2.05 percent, China Shenhua Energy rose 0.23 percent, Gemdale surrendered 2.49 percent and PetroChina was unchanged.

The lead from Wall Street is mostly negative as the major averages opened higher on Friday but quickly headed south, although the Dow was able to recover before the close.

The Dow added 39.15 points or 0.12 percent to finish at 33,670.29, while the NASDAQ tumbled 166.99 points or 1.23 percent to end at 13,407.23 and the S&P 500 slumped 21.83 points or 0.50 percent to close at 4,327.78.

For the week, the Dow added 0.8 percent, the NASDAQ dipped 0.2 percent and S&P rose 0.5 percent.

Selling pressure emerged following the release of a report from the University of Michigan showing a slump in consumer sentiment and a surge in inflation expectations. The data generated some negative sentiment, although a decrease in treasury yields helped to limit the downside.

Traders also kept an eye on developments in the conflict in the Middle East between Israel and Hamas.

Oil prices rose sharply on Friday amid rising concerns about the potential impact on global crude supplies due to the ongoing conflict between Israel and Hamas. West Texas Intermediate Crude oil futures for November spiked $4.78 or 5.8 percent at $87.69 a barrel. WTI crude futures gained 6 percent in the week.