RTTNews - The China stock market has finished lower now in two of three sessions since the end of the modest two-day winning streak in which it had collected 100 points or 3 percent. The Shanghai Composite Index maintained support at the 3,210-point plateau, and now analysts are forecasting a modest rebound at the opening of trade on Wednesday.
The global forecast for the Asian markets remains positive, although many of the regional bourses are riding lengthy winning streaks and may see some more of the profit taking that crept into trade towards the end of the previous session. Biotechnology, chemical and pharmaceutical stocks are tipped higher, while the financials could ease under pressure. The European and U.S. markets finished higher again, and the Asian markets are expected to follow suit.
The SCI finished sharply lower on Tuesday, dragged to the downside by weakness among the automobile producers and the steel stocks.
For the day, the index lost 18.93 points or 1.64 percent to close at 3,213.21 after trading between 3,207.50 and 3,279.59. The Shenzhen Component Index fell 204 points or 1.52 percent to finish at 13,177.21 for a combined turnover of 345.91 billion yuan. Losers outnumbered gainers by 709 to 161 in Shanghai and 619 to129 in Shenzhen.
Among the decliners, Shandong Jinling Mining lost 6.68 percent and Guangzhou Iron and Steel shed 6.08 percent. Finishing higher, Anhui Gujing Distillery rose by the daily limit of 10 percent, while Northeast Securities was up 4.04 percent and Guoyuan Securities gained 2.35 percent.
The lead from Wall Street is cautiously optimistic once again as a spike in buying interest in the afternoon helped stocks to finish modestly higher on Tuesday after showing a lack of direction for much of the day. The major averages all finished in positive territory by solid margins, building on their recent gains.
Stocks started strong following a slew of largely promising earnings, with five Dow components reporting their quarterly results. Despite beating Wall Street estimates, Caterpillar (CAT), Coca-Cola (KO), DuPont (DD), Merck (MRK) and United Technologies (UTX) saw mixed reaction.
In other news, Federal Reserve Chairman Ben Bernanke testified before the House Financial Services Committee today, stating that the U.S. economy is showing signs of stabilization and that the stimulus authorities pumped into the global economy late last year probably helped to avoid a collapse of the financial system.
Bernanke also said that the Fed is prepared to remove its stimulus when the time is appropriate in order to avoid a spike in inflation. However, he reiterated that the economy is still in a fragile state, with unemployment high and consumer spending shaky.
The Fed chief is scheduled to delivery his second day of testimony before the Senate Banking Committee at 10 a.m. ET Wednesday morning.
Meanwhile, President Barack Obama continued to push for the passage of his healthcare plan this afternoon, looking to gather additional support for the much-discussed bill that aims to provide universal healthcare.
The major averages moved to the upside heading into the close, finishing near their best levels of the day. The Dow advanced 67.79 points or 0.8 percent to 8,915.94, the NASDAQ climbed 6.91 points or 0.4 percent to 1,916.20 and the S&P 500 rose 3.45 points or 0.4 percent to 954.58.
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