Chinese stocks set to open under pressure on Wednesday


(RTTNews) – The Chinese stock market has alternated between positive and negative results over the past four trading days since ending a two-day decline in which it fell more than 60 points or 1.9%. The new Shanghai Composite Index sits just above the 3,225-point plateau and it could take further damage on Wednesday.

The global forecast for Asian markets is weak due to continued concerns about the economy and interest rate outlook. European markets were mixed and US stock markets were down and Asian markets figured to share the difference.

The SCI ended slightly lower on Tuesday as losses in resource stocks and energy producers were tempered by support from financial stocks and properties.

For the day, the index lost 13.51 points or 0.42% to end at 3,227.22 after trading between 3,212.63 and 3,243.75. The Shenzhen Composite Index fell 10.02 points or 0.47% to end at 2,137.72.

Among assets, Industrial and Commercial Bank of China added 0.69%, while Bank of China rose 0.33%, China Construction Bank added 0.37%, China Merchants Bank strengthened 1.53%, China Life Insurance jumped 1.65%, Jiangxi Copper fell 0.89%, Aluminum Corp of China (Chalco) fell 1.70%, Yankuang Energy fell 5.81%, PetroChina fell 0.18%, China Petroleum and Chemical (Sinopec) rose 0.70%, Huaneng Power fell 1.93%, China Shenhua Energy plunged 4.27%, Gemdale climbed 1.57%. Poly Developments rose 2.05%, China Vanke jumped 2.06%, China Fortune Land gained 1.06% and Bank of Communications and Beijing Capital Development were unchanged.

Wall Street’s lead is negative as the major averages shed support early on Tuesday, heading south rapidly and remaining in the red for the rest of the session.

The Dow Jones fell 308.12 points or 0.96% to end at 31,790.87, while the NASDAQ fell 134.53 points or 1.12% to close at 11,883.14 and the S&P 500 fell 44.45 points or 1.10% to end at 3,986.16.

The prolonged sell-off reflects lingering concerns about the outlook for interest rates and the impact that further rate hikes will have on the economy.

Stocks have been under pressure since Federal Reserve Chairman Jerome Powell said last Friday that the central bank plans to continue raising interest rates aggressively. Powell suggested that even after the Fed finishes tightening monetary policy, rates will remain at higher levels to ensure inflation remains contained.

In economic news, the Conference Board said consumer confidence rebounded more than expected in August. Additionally, the Labor Department said the number of job openings was little changed at 11.2 million on the last business day of July.

The price of crude oil showed substantial downward movement in Tuesday’s session as rising interest rates lead to a global economic slowdown, reducing demand for energy. West Texas Intermediate crude for October delivery plunged $5.37 or 5% to $91.64 a barrel.

Closer to home, China will see August results for its manufacturing, non-manufacturing and composite indices later this morning; in July, their scores were 49.0, 53.8 and 52.5 respectively.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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