(RTTNews) – The China stock market on Wednesday snapped the two-day winning streak in which it had gathered more than 40 points or 1.2 percent. The Shanghai Composite Index now rests just beneath the 3,530-point plateau and it’s looking at another soft start again on Thursday.
The global forecast for the Asian markets is flat to lower, thanks mainly to sinking crude oil prices. The European markets were barely down and the U.S. bourses were mixed and little changed and the Asian markets figure to split the difference.
The SCI finished sharply lower on Wednesday following losses from the financial shares and property stocks, while the resource companies were wildly mixed.
For the day, the index dropped 38.02 points or 1.07 percent to finish at 3,528.50 after trading between 3,525.49 and 3,560.83. The Shenzhen Composite Index sank 21.90 points or 0.88 percent to end at 2,470.07.
Among the actives, Industrial and Commercial Bank of China dropped 0.84 percent, while Bank of China shed 0.66 percent, China Construction Bank skidded 1.41 percent, China Merchants Bank tanked 2.04 percent, Bank of Communications retreated 1.34 percent, China Life Insurance plunged 2.56 percent, Jiangxi Copper plummeted 3.57 percent, Aluminum Corp of China (Chalco) cratered 4.85 percent, Yanzhou Coal skyrocketed 10.01 percent, PetroChina declined 1.41 percent, China Petroleum and Chemical (Sinopec) lost 0.71 percent, China Shenhua Energy gained 0.73 percent, Gemdale tumbled 2.49 percent, Poly Developments sank 2.08 percent, China Vanke dropped 2.64 percent, China Fortune Land surrendered 3.48 percent and Beijing capital Development was unchanged.
The lead from Wall Street offers little clarity as stocks opened higher on Wednesday but then cooled and hugged the unchanged line, eventually finishing mixed and flat.
The Dow added 44.44 points or 0.13 percent to finish at 34,993.23, while the NASDAQ lost 32.70 points or 0.22 percent to end at 14,644.95 and the S&P 500 rose 5.09 points or 0.12 percent to close at 4,374.30.
Stocks moved to the upside early in the session amid a positive reaction to Federal Reserve Chair Jerome Powell’s remarks before the House Financial Services Committee, which suggested the central bank is not likely to begin tightening monetary policy anytime soon.
Later in the day, the Federal Reserve released its Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts. The Beige Book noted the U.S. economy strengthened from late May to early July, with the pace of growth described as moderate to robust.
On the earnings front, financial giant Citigroup (C) reported better than expected Q2 earnings, while Delta Air Lines (DAL) reported a narrower than expected Q2 loss on revenues that exceeded estimates. Bank of America (BAC) reported Q2 earnings that beat expectations but on weaker than expected revenues.
Crude oil futures settled lower on Wednesday, weighed down by data showing a drop in gasoline demand. Data showing a drop in China’s first-half crude imports also weighed on oil prices. West Texas Intermediate Crude oil futures for August tumbled $2.12 or 2.8 percent at $73.13 a barrel.
Closer to home, China is scheduled to release a batch of data on Thursday later this morning. On tap are Q2 figures for gross domestic product and June numbers for industrial production, retail sales, fixed asset investment and unemployment.
GDP is predicted to expand 1.2 percent on quarter and 8.1 percent on year after rising 0.6 percent on quarter and 18.3 percent on year in the three months prior.
Industrial production is tipped to gain 7.8 percent on year, slowing from 8.8 percent in May. Retail sales are expected to jump an annual 11.0 percent, down from 12.4 percent in the previous month. FAI is expected to gain 12.1 percent on year after rising 15.4 percent a month earlier. The jobless rate in May was 5.0 percent.