Soft Start Predicted For China Stock Market

(RTTNews) - The China stock market on Wednesday halted the two-day slide in which it had dropped more than 30 points or 1 percent. The Shanghai Composite Index now rests just above the 3,175-point plateau although it's likely to turn lower again on Thursday.

The global forecast for the Asian markets is soft on renewed concerns over the outlook for interest rates. The European and U.S. markets were down and the Asian bourses figure to open in similar fashion.

The SCI finished barely higher on Wednesday as gains from the resource and energy stocks were offset by weakness from the properties and a mixed picture from the financial sector.

For the day, the index perked 0.20 points or 0.01 percent to finish at 3,176.53 after trading between 3,168.59 and 3,189.83. The Shenzhen Composite Index fell 1.77 points or 0.09 percent to end at 2,048.61.

Among the actives, Industrial and Commercial Bank of China dipped 0.23 percent, while China Construction Bank fell 0.36 percent, China Merchants Bank rallied 2.13 percent, Bank of Communications collected 0.21 percent, China Life Insurance eased 0.20 percent, Jiangxi Copper added 0.63 percent, Aluminum Corp of China (Chalco) climbed 1.06 percent, Yankuang Energy strengthened 1.48 percent, PetroChina improved 0.78 percent, China Petroleum and Chemical (Sinopec) lost 0.45 percent, Huaneng Power shed 0.58 percent, China Shenhua Energy gained 0.59 percent, Gemdale retreated 1.35 percent, Poly Developments slumped 1.19 percent, China Vanke skidded 1.18 percent, China Fortune Land tumbled 2.20 percent, Beijing Capital Development sank 0.84 percent and Bank of China was unchanged.

The lead from Wall Street ends up negative as the major averages opened higher on Wednesday and stayed that way before tumbling after the Federal Reserve's monetary policy announcement.

The Dow dropped 142.29 points or 0.42 percent to finish at 33,966.35, while the NASDAQ sank 85.93 points or 0.76 percent to close at 11,170.89 and the S&P 500 lost 24.33 points or 0.61 percent to end at 3,995.32.

The lower close on Wall Street came after the Fed announced its widely expected decision to slow the pace of interest rate increases but still signaled further rate hikes ahead.

After raising interest rates by 75 basis points at four consecutive meetings, the Fed announced its decision to raise interest rates by 50 basis points to a target range of 4.25 to 4.50 percent.

But the central bank reiterated that it anticipates ongoing increases in rates will be appropriate. The economic projections provided along with the announcement now suggest the Fed expects rates to be raised higher than forecast in September.

Crude oil prices climbed higher on Wednesday, lifted by an upward revision in demand forecast by the International Energy Agency due to the shutdown of the Keystone pipeline following a massive leak. West Texas Intermediate Crude oil futures for January ended higher by $1.89 or 2.5 percent at $77.28 a barrel.

Closer to home, China will see November data for industrial production, retail sales, fixed asset investment, house prices and unemployment later today.

Industrial production is expected to rise 3.6 percent, down from 5.0 percent in October. Retail sales are tipped to slip an annual 3.7 percent after easing 0.5 percent in the previous month. FAI is called higher by 5.6 percent on year, slowing from 5.8 percent a month earlier. In October, the jobless rate was 5.5 percent and house prices rose an annual 1.6 percent.