No Relief Yet For China Stock Market

(RTTNews) - The China stock market has moved lower in consecutive trading days, surrendering almost 30 points or 1 percent along the way. The Shanghai Composite Index now sits just above the 3,260-point plateau and it's looking at a soft start again on Thursday.

The global forecast for the Asian markets is broadly negative following a downgrade in the United States' credit rating. The European and U.S. markets were firmly lower and the Asian markets are expected to open in similar fashion.

The SCI finished modestly lower on Wednesday following losses from the financial shares and oil companies.

For the day, the index dropped 29.26 points or 0.89 percent to finish at 3,261.69 after trading between 3,252.30 and 3,290.82. The Shenzhen Composite Index fell 5.70 points or 0.28 percent to end at 2,056.06.

Among the actives, Industrial and Commercial Bank of China tumbled 2.30 percent, while Bank of China retreated 2.80 percent, China Construction Bank tanked 2.92 percent, China Merchants Bank surrendered 2.74 percent, Bank of Communications stumbled 2.41 percent, China Life Insurance dipped 0.22 percent, Aluminum Corp of China (Chalco) added 0.63 percent, Yankuang Energy declined 2.60 percent, PetroChina plummeted 5.57 percent, China Petroleum and Chemical (Sinopec) plunged3.83 percent, Huaneng Power lost 0.45 percent, China Shenhua Energy slumped 1.86 percent, Poly Developments eased 0.21 percent, China Vanke was down 0.20 percent and China Fortune Land, Jiangxi Copper and Gemdale were unchanged.

The lead from Wall Street suggests consolidation as the major averages opened lower and remained in the red throughout the trading day, ending near session lows.

The Dow tumbled 348.16 points or 0.98 percent to finish at 35,282.52, while the NASDAQ sank 310.47 points or 2.17 percent to end at 13,973.45 and the S&P 500 dropped 63.34 points or 1.38 percent to close at 4,513.39.

The sell-off on Wall Street came after credit rating agency Fitch Ratings unexpectedly downgraded the United States' credit rating. Fitch downgraded the U.S.' long-term foreign-currency issuer default rating to AA+ from AAA, citing a "steady deterioration in standards of governance over the last 20 years."

In U.S. economic news, payroll processor ADP said U.S. private sector employment jumped more than expected in July. But while the report points to continued strength in the U.S. labor market, the data may lead to renewed concerns about the outlook for interest rates.

On Friday, the Labor Department is scheduled to release its more closely watched report on employment in July.

Crude oil prices tumbled on Wednesday amid concerns about outlook for demand, despite data showing a massive drop in crude stockpiles in the U.S. last week. West Texas Intermediate Crude oil futures for September ended lower by $.88 or 2.3 percent at $79.49 a barrel.