Continued Consolidation Called For China Stock Market

The China stock market has finished lower in two straight sessions, slipping almost 35 points or 1.9 percent along the way. The Shanghai Composite Index now rests just beneath the 3,460-point plateau and it’s looking at another red light for Wednesday’s trade.

The global forecast for the Asian markets is negative on geopolitical concerns over escalation of conflict between Russia and Ukraine. The European and U.S. markets were down and the Asian markets are tipped to follow a similar path.

The SCI finished modestly lower on Tuesday following losses from the financial shares and property stocks, while the oil companies were up and the other resources were mixed.

For the day, the index lost 33.47 points or 0.96 percent to finish at 3,457.15 after trading between 3,437.67 and 3,473.39. The Shenzhen Composite Index retreated 28.50 points or 1.23 percent to end at 2,297.30

Among the actives, Industrial and Commercial Bank of China sank 0.83 percent, while Bank of China fell 0.31 percent, China Construction Bank shed 0.80 percent, China Merchants Bank skidded 1.04 percent, Bank of Communications lost 0.40 percent, China Life Insurance slid 0.66 percent, Jiangxi Copper declined 0.50 percent, Aluminum Corp of China (Chalco) jumped 1.79 percent, Yankuang Energy soared 3.80 percent, PetroChina surged 4.13 percent, China Petroleum and Chemical (Sinopec) advanced 0.92 percent, Huaneng Power plummeted 4.47 percent, China Shenhua Energy gained 0.72 percent, Gemdale was down 0.52 percent, Poly Developments added 0.67 percent, China Vanke dipped 0.29 percent, Beijing Capital Development weakened 0.52 percent and China Fortune Land tanked 2.45 percent.

The lead from Wall Street suggests consolidation as the major averages opened slightly lower on Tuesday but saw losses accelerate as the day progressed, ending firmly in the red.

The Dow plunged 482.57 points or 1.42 percent to finish at 33,596.61, while the NASDAQ tumbled 166.55 points or 1.23 percent to end at 13,381.52 and the S&P 500 dropped 44.11 points or 1.01 percent to close at 4,304.76.

The weakness on Wall Street came after Russian President Vladimir Putin recognized two Ukrainian separatist regions – Donetsk and Luhansk – as sovereign states and sent troops into those territories as “peacekeepers.”

Describing the latest actions by Russia as the beginning of an invasion of Ukraine, U.S. President Joe Biden announced the first tranche of U.S. sanctions on two large Russian financial institutions, VEB and Russia’s military bank, and Russia’s sovereign debt, as well as Russian elites and their family members.

The U.K. also announced a first tranche of sanctions on Russia, targeting five Russian banks and three “very high net worth” individuals.

Oil prices moved up sharply Tuesday on concerns over supplies following Russia’s aggressive move into Ukraine. It is feared that a full-blown conflict in Ukraine could cause major disruption to crude supplies. West Texas Intermediate Crude oil futures for April ended higher by $1.70 or 1.9 percent at $91.91 a barrel.