The China stock market on Wednesday halted the two-day winning streak in which it had picked up almost 50 points or 1.4 percent. The Shanghai Composite Index now rests just beneath the 3,560-point plateau and it may take further damage on Thursday.
The global forecast for the Asian markets suggests further consolidation as rising bond yields continue to hammer technology stocks – although support from crude oil may limit the downside. The European markets were up and the U.S. markets were down and the Asian markets figure to follow the latter lead.
The SCI finished modestly lower on Wednesday following mixed performances from the financial shares, property stocks and resource companies.
For the day, the index slipped 11.73 points or 0.33 percent to finish at 3,558.18 after trading between 3,541.66 and 3,578.73. The Shenzhen Composite Index dropped 22.71 points or 0.92 percent to end at 2,442.12.
Among the actives, Industrial and Commercial Bank of China rose 0.21 percent, while Bank of China fell 0.32 percent, China Construction Bank shed 0.33 percent, China Merchants Bank jumped 1.41 percent, China Life Insurance collected 0.38 percent, Jiangxi Copper dropped 0.85 percent, Aluminum Corp of China (Chalco) added 0.34 percent, Yankuang Energy rallied 2.05 percent, PetroChina perked 0.18 percent, Huaneng Power climbed 1.10 percent, China Shenhua Energy improved 0.73 percent, Gemdale advanced 0.96 percent, Poly Developments lost 0.37 percent, China Vanke spiked 1.44 percent, Beijing Capital Development increased 0.99 percent and Bank of Communications and China Petroleum and Chemical (Sinopec) were unchanged.
The lead from Wall Street is broadly negative as the major averages were unable to hold on to early gains on Wednesday, bouncing back and forth across the unchanged line before finishing in the red for the second straight session.
For the day, the Dow tumbled 339.82 points or 0.96 percent to finish at 35,028.65, while the NASDAQ dropped 166.64 points or 1.15 percent to close at 14,340.25 and the S&P 500 sank 44.35 points or 0.97 percent to end at 4.532.76.
The late slide on Wall Street came amid rising Treasury yields and worries over inflation and looming interest rate hikes after U.S. Treasury yields hit fresh two-year highs amid Fed rate hike expectations.
Most analysts believe a rate hike of at least 25 basis points from the FOMC is imminent, although some are now starting to think it may be a 50 bp boost.
In economic news, the Commerce Department said that U.S. homebuilding increased to a nine-month high in December amid a surge in multi-family housing projects.
Crude oil prices continued their recent upward surge on Wednesday, rising for the fifth straight day to a fresh seven-year high following supply issues in the Middle East. West Texas Intermediate for February contract jumped $1.22 or 1.43 percent to $86.65 per barrel.
Closer to home, China will see prime rate numbers for its one-year and five-year loans later today; previously, they were 3.8 percent and 4.65 percent, respectively.
Market Analysis
China Stock Market May Extend Wednesday’s Losses
2022-01-20 01:00:15
