China Shares Tipped To Bounce Higher Again On Thursday

The China stock market on Wednesday snapped the two-day winning streak in which it had advanced almost 25 points or 0.7. The Shanghai Composite Index now sits just shy of the 3,600-point plateau although it’s expected to rebound on Thursday.

The global forecast for the Asian markets suggests mild upside, supported by crude oil prices. The European and U.S. markets were slightly higher and the Asian bourses are tipped to open in similar fashion.

The SCI finished modestly lower on Wednesday as losses from the resource stocks were mitigated by support from the properties and financials.

For the day, the index lost 27.58 points or 0.76 percent to finish at 3,597.14 after trading between 3,584.60 and 3,629.29. The Shenzhen Composite Index sank 28.68 points or 1.18 percent to end at 2,400.90.

Among the actives, Industrial and Commercial Bank of China rose 0.19 percent, while Bank of China collected 0.60 percent, China Construction Bank shed 0.44 percent, China Merchants Bank added 0.38 percent, Bank of Communications gained 0.21 percent, China Life Insurance improved 0.48 percent, Jiangxi Copper plunged 2.89 percent, Aluminum Corp of China (Chalco) tanked 2.23 percent, Yanzhou Coal skidded 1.21 percent, China Petroleum and Chemical (Sinopec) improved 0.45 percent, Baoshan Iron retreated 2.14 percent, Gemdale gathered 0.56 percent, Poly Developments perked 0.75 percent, China Vanke was up 0.60 percent, China Fortune Land soared 3.72 percent and PetroChina was unchanged.

The lead from Wall Street is cautiously optimistic as stocks spent much of Wednesday’s session bouncing back and forth across the unchanged line before finally ending slightly higher.

The Dow added 25.07 points or 0.07 percent to finish at 34,600.38, while the NASDAQ rose 19.85 points or 0.14 percent to end at 13,756.33 and the S&P 500 was up 6.08 points or 0.14 percent to close at 4,208.12.

The early strength on Wall Street partly reflected continued optimism about the outlook for the global economy following Tuesday’s upbeat manufacturing data although trading activity remained light amid lingering inflation concerns.

The Labor Department’s looming monthly jobs report also kept some traders on the sidelines ahead of the release of the closely watched data on Friday.

Traders largely shrugged off the Federal Reserve’s Beige Book, which said the U.S. economy increased at a somewhat faster rate from early April to late May due in part to the positive effects of increased Covid-19 vaccination rates and relaxed social distancing measures.

Crude oil prices rose sharply on Wednesday, extending gains from the previous session, amid rising hopes about a pickup in energy demand and on the decision by OPEC to gradually increase crude production. West Texas Intermediate Crude oil futures for July ended up $1.11 or 1.6 percent at $68.83 a barrel, the highest since October 2018.

Closer to home, China will release May results for the services and composite PMIs from Caixin later this morning; in April, their scores were 56.3 and 54.7, respectively.

Market Analysis