Profit Taking Expected For China Stock Market

The China stock market has finished higher in four straight sessions, gathering almost 180 points or 6 percent along the way. The Shanghai Composite Index now rests just above the 3,065-point plateau although it’s overdue for consolidation on Friday.

The global forecast for the Asian markets suggests consolidation on concerns for the outlook for interest rates and the global economy. The European and U.S. markets were solidly lower and the Asian bourses are tipped to open in similar fashion.

The SCI finished modestly higher on Thursday following gains from the resource stocks, weakness from the financials and a mixed picture from the property sector.

For the day, the index gained 20.70 points or 0.68 percent to finish at 3,067.76 after trading between 3,042.12 and 3,082.23. The Shenzhen Composite Index picked up 12.78 points or 0.68 percent to end at 1,891.66.

Among the actives, Industrial and Commercial Bank of China shed 0.63 percent, while China Construction Bank eased 0.16 percent, China Merchants Bank retreated 1.68 percent, Bank of Communications declined 1.77 percent, China Life Insurance collected 0.39 percent, Jiangxi Copper dipped 0.06 percent, Aluminum Corp of China (Chalco) skidded 1.05 percent, Yankuang Energy rose 0.20 percent, PetroChina climbed 1.30 percent, China Petroleum and Chemical (Sinopec) perked 0.23 percent, Huaneng Power plunged 2.47 percent, China Shenhua Energy shed 0.49 percent, Gemdale plummeted 4.13 percent, Poly Developments tanked 3.20 percent, China Fortune Land skyrocketed by the 10 percent daily limit, China Vanke was up 0.26 percent and Bank of China was unchanged.

The lead from Wall Street is broadly negative as the major averages opened under pressure and saw the losses accelerate as the day progressed, finishing deep in the red.

The Dow plummeted 1,063 points or 3.12 percent to finish at 32,997.97, while the NASDAQ plunged 647.16 points or 4.99 percent to close at 12,317.16 and the S&P 500 tumbled 153.30 points or 3.56 percent to end at 4,146.87.

The sell-off on Wall Street came as traders cashed in on the rally that followed the Federal Reserve’s monetary policy announcement on Wednesday, which was less hawkish than some had feared.

But concerns about higher rates, inflation, the economic outlook and the ongoing war in Ukraine remain, contributing to the sharp pullback on Wall Street. A sharp increase in treasury yields also weighed as the yield on the benchmark ten-year note hit to its highest levels in three years.

Traders were also looking ahead to the release of the Labor Department’s closely watched monthly jobs report later today.

Crude oil futures settled higher Thursday, benefitting from the European Union proposal to impose sanctions on Russian oil, although prices pared some gains as the dollar rebounded on safe haven buying. West Texas Intermediate Crude oil futures for June ended higher by $0.45 or 0.4 percent at $108.26 a barrel.