Renewed Support Predicted For China Stock Market

(RTTNews) - The China stock market on Wednesday halted the three-day winning streak in which it had gained more than 60 points or 1.8 percent. The Shanghai Composite Index now rests just beneath the 3,485-point plateau although it figures to bounce higher again on Thursday.

The global forecast for the Asian markets is positive, with surging crude oil prices and strength among financials expected to boost the oversold markets. The European and U.S. markets were up sharply and the Asian markets are expected to open in similar fashion.

The SCI finished slightly lower on Wednesday following mixed performances from the financials, properties and energy companies.

For the day, the index dipped 4.64 points or 0.13 percent to finish at 3,484.19 after trading between 3,467.00 and 3,486.62. The Shenzhen Composite Index lost 13.07 points or 0.56 percent to end at 2,313.18.

Among the actives, Industrial and Commercial Bank of China collected 0.43 percent, while Bank of China added 0.32 percent, China Construction Bank fell 0.33 percent, China Merchants Bank retreated 1.53 percent, Bank of Communications rose 0.41 percent, China Life Insurance declined 1.23 percent, Jiangxi Copper rallied 2.88 percent, Aluminum Corp of China (Chalco) soared 8.65 percent, Yankuang Energy surged 8.69 percent, PetroChina jumped 1.92 percent, China Petroleum and Chemical (Sinopec) advanced 0.93 percent, Huaneng Power surrendered 1.38 percent, China Shenhua Energy and China Fortune Land both climbed 0.96 percent, Poly Developments strengthened 1.22 percent, China Vanke sank 0.31 percent and Gemdale and China Minsheng Bank were unchanged.

The lead from Wall Street is upbeat as the major averages opened higher on Wednesday and accelerated as the session progressed, ending near daily highs.

The Dow surged 596.40 points or 1.79 percent to finish at 33,891.35, while the NASDAQ soared 219.56 points or 1.62 percent to end at 13,752.02 and the S&P 500 jumped 80.28 points or 1.86 percent to close at 4,386.54.

The rally on Wall Street came on surging crude oil prices and a rebound by treasury yields.

Also, Federal Reserve Chair Jerome Powell told the House Financial Services Committee the Fed still believes it will be appropriate to raise interest rates later this month, citing inflation well above 2 percent and a strong labor market. The likely increase in interest rates comes even though Powell acknowledged that the Russia-Ukraine conflict has introduced significant uncertainty for the U.S. economic outlook.

On the U.S. economic front, payroll processor ADP said U.S. private sector employment jumped much more than expected in February.

Crude oil prices climbed higher on Wednesday, extending gains amid concerns about global crude supplies due to the ongoing Russia-Ukraine conflict and data showing a drop in U.S. crude inventories. West Texas Intermediate Crude oil futures for April ended higher by $7.19 or 7 percent at $110.60, the highest settlement since May 2011.

Closer to home, China will see February results for its services and composite PMIs from Caixin later this morning; in January, their scores were 51.4 and 50.1, respectively.