Soft Start Anticipated For China Stock Market

(RTTNews) - The China stock market on Tuesday halted the three-day losing streak in which it had slumped almost 55 points or 1.7 percent. The Shanghai Composite Index now sits just above the 3,275-point plateau although it may find renewed consolidation on Wednesday.

The global forecast for the Asian markets is negative, with weakness expected especially from the oil and technology stocks ahead of the FOMC rate decision later today. The European and U.S. markets were down and the Asian markets are predicted to follow that lead.

The SCI finished modestly higher on Tuesday following gains from the financial shares, property stocks and resource companies.

For the day, the index gained 27.05 points or 0.83 percent to finish at 3,277.44 after trading between 3,246.04 and 3,282.41. The Shenzhen Composite Index advanced 21.87 points or 1.01 percent to end at 2,187.23.

Among the actives, Industrial and Commercial Bank of China shed 0.45 percent, while Bank of China collected 0.65 percent, China Merchants Bank strengthened 1.34 percent, Bank of Communications rose 0.43 percent, China Life Insurance gained 0.67 percent, Jiangxi Copper jumped 1.93 percent, Aluminum Corp of China (Chalco) perked 0.22 percent, Yankuang Energy soared 2.39 percent, PetroChina climbed 1.16 percent, China Petroleum and Chemical (Sinopec) improved 0.49 percent, Huaneng Power eased 0.15 percent, China Shenhua Energy rallied 1.57 percent, Gemdale skyrocketed 8.17 percent, Poly Developments surged 5.78 percent, China Vanke spiked 3.14 percent, China Fortune Land soared 5.12 percent, Beijing Capital Development accelerated 3.91 percent and China Construction Bank was unchanged.

The lead from Wall Street is soft as the major averages opened lower on Tuesday and remained in the red throughout the day, ending near session lows.

The Dow tumbled 228.50 points or 0.71 percent to finish at 31,761.54, while the NASDAQ plunged 220.09 points or 1.87 percent to close at 11,562.57 and the S&P 500 dropped 45.79 points or 1.15 percent to end at 3,921.05.

The weakness on Wall Street also came as traders looked ahead to the Federal Reserve's monetary policy announcement later today. The Fed is widely expected to announce another 75 basis point rate hike as part of its efforts to combat elevated inflation.

In corporate news, Walmart came under pressure after lowering its guidance for the second quarter and full year due to pricing actions aimed to improve inventory levels. Auto giant General Motors (GM) also moved to the downside after reporting Q2 earnings that missed estimates.

In U.S. economic news, the Commerce Department said new home sales pulled back by more than expected in June. Also, the Conference Board said consumer confidence in the U.S. deteriorated by more than expected in of July.

Crude oil prices fell on Tuesday, weighed by an announcement from the Biden administration about more sales from the national oil reserve to fight inflation at the pump. The dollar's rebound from recent losses also contributed the drop in oil prices. West Texas Intermediate Crude oil futures for September ended lower by $1.72 or 1.8 percent at $94.98 a barrel.

Closer to home, China will provide June numbers for industrial profits later today; in May, profits were up 1.0 percent year to date.