Renewed Selling Pressure Expected For China Stock Market

(RTTNews) – The China stock market on Friday ended the two-day slide in which it had fallen almost 45 points or 1.3 percent. The Shanghai Composite Index now rests just above the 3,565-point plateau although it’s likely to head south again on Monday.

The global forecast for the Asian markets is negative on disappointing earnings news and ongoing concerns over the spread of the coronavirus. The European and U.S. markets were down and the Asia bourses figure to follow suit.

The SCI finished barely higher on Friday following gains from the financial shares and mixed performances from the properties and resource stocks.

For the day, the index rose 0.47 points or 0.01 percent to finish at 3,566.38 after trading between 3,533.79 and 3,589.27. The Shenzhen Composite Index added 6.46 points or 0.27 percent to end at 2,366.86.

Among the actives, Industrial and Commercial Bank of China climbed 1.38 percent, while Bank of China collected 0.62 percent, China Construction Bank accelerated 2.14 percent, China Merchants Bank soared 4.26 percent, Bank of Communications added 0.67 percent, China Life Insurance spiked 2.65 percent, Jiangxi Copper rose 0.23 percent, Aluminum Corp of China (Chalco) fell 0.28 percent, Yanzhou Coal advanced 1.11 percent, PetroChina retreated 1.15 percent, China Petroleum and Chemical (Sinopec) was up 0.24 percent, China Shenhua Energy gained 0.59 percent, Gemdale eased 0.16 percent, Poly Developments improved 0.32 percent and China Vanke fell 0.13 percent.

The lead from Wall Street is soft as stocks opened sharply lower on Friday; the major averages recouped some of the losses but still finished firmly in the red.

The Dow shed 177.26 points or 0.57 percent to finish at 30,814.26, while the NASDAQ sank 114.14 points or 0.87 percent to end at 12,998.50 and the S&P 500 fell 27.29 points or 0.72 percent to close at 3,768.25. For the week, the Dow lost 0.9 percent and the NASDAQ and S&P both fell 1.5 percent.

The early sell-off on Wall Street reflected a negative reaction to disappointing earnings news from financial giants Wells Fargo (WFC), Citigroup (C) and JPMorgan Chase (JPM).

Negative sentiment was also generated by a report from the Commerce Department showing a continued decline in U.S. retail sales in December. But the Federal Reserve released a separate report showing U.S. industrial production jumped much more than expected last month.

Crude oil futures settled sharply lower on Friday as worries about energy demand resurfaced amid rising coronavirus cases and tighter restrictions. West Texas Intermediate Crude oil futures for February ended down $1.21 or 2.3 percent at $52.36 a barrel.

Closer to home, China is scheduled to release a batch of data this morning, including Q4 numbers for gross domestic product, as well as December data for industrial production, retail sales, unemployment and fixed asset investment.

GDP is expected to rise 3.2 percent on quarter and 6.1 percent on year after gaining 2.7 percent on quarter and 4.9 percent on year in the three months prior.

Industrial production is tipped to add 6.9 percent on year after rising 7.0 percent in November. Retail sales are pegged at 5.5 percent, up from 5.0 percent in the previous month. Fixed Asset Investment is expected to advance an annual 3.2 percent, up from 2.6 percent a month earlier. The jobless rate in November was 5.2 percent.

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