RTTNews - The China stock market has extended its losing streak to four sessions now, giving away more than 220 points or 6.3 percent along the way. The Shanghai Composite Index slid below support at 3,250 points, and now analysts are looking for the losses to accelerate further still at the opening of trade on Tuesday.
The global forecast for the Asian markets is flat with a negative bias - particularly as investors may look to consolidate their positions after strong gains in the previous trading day. Commodities could see significant selling pressure, along with properties and airlines. The European markets were mostly lower, while the U.S. bourses ended slightly in negative territory - and the Asian markets are tipped also to move to the downside.
The SCI finished slightly lower on Monday, as losses among the financials and properties weighed heavily on investors.
For the day, the index retreated 10.93 points or 0.34 percent to close at 3,249.76 after trading between 3,201.06 and 3,307.89. The Shenzhen Index fell 1.61 points or 0.01 percent to end at 12,973.65 for a combined turnover of 237.48 billion yuan. Gainers outnumbered losers by 547 to 306 in Shanghai and 464 to 273 in Shenzhen.
Among the actives, China Construction Bank fell 2.0 percent, while China Vanke dropped 1.65 percent, Bank of Communications shed 3.36 percent, Bank of Nanjing lost 1.63 percent, Yunnan Aluminum jumped 8.51 percent, Yunnan Copper added 4.86 percent and Poly Real Estate Group lost 2.5 percent.
The lead from Wall Street has a touch of downside as stocks posted modest losses on Monday with traders cashing in on recent gains amid a lack of significant moves. The major averages all finished in negative territory, kicking off the week on a sour note. The decline came ahead of some key economic reports on tap for this week, including data on retail sales, industrial production and weekly jobless claims.
Further, the Federal Open Market Committee will make its interest rate announcement on Wednesday, with the key fed funds rate expected to remain unchanged amid a challenging economic environment.
On the corporate front, Freddie Mac (FRE) said late Friday that it no longer needs government aid, as the mortgage lender posted a positive net worth. Benefiting from accounting adjustments and gains, Freddie Mac reported a second quarter profit of $821 million on a notable increase in revenues to $7.47 billion from last year's $1.59 billion.
Warren Buffett-owned Berkshire Hathaway (BRKA) reported a 14 percent increase in second quarter earnings, fueled by gains from derivatives trading, which soared to $1.53 billion from $453 million in the second quarter of last year. The firm earned $1,147 per share, while Wall Street analysts expected the company to earn $1,238 per share for the quarter.
Microsoft (MSFT), which recently struck a ten-year deal with Yahoo (YHOO) to share search engine technology and ad revenue, announced an agreement with French ad company Publicis to sell its Razorfish digital advertising unit.
The major averages regained some ground going into the close of trading, although they remained stuck in the red. The Dow closed down by 32.12 points or 0.3 percent at 9,337.95, the NASDAQ slipped by 8.01 points or 0.4 percent to 1,992.24 and the S&P 500 fell by 3.38 points or 0.3 percent to 1,007.10.
In economic news, China is scheduled to release a raft of data on Tuesday, including July numbers for consumer price index, producer price index, retail sales, urban fixed asset investment, imports, exports and trade balance.
CPI is expected to ease 1.6 percent on year after the 1.7 percent contraction a month earlier. PPI is called lower by an annual 8.3 percent following the 7.8 percent decline in June. Urban FAI is expected to rise 34 percent on year after the 33.6 percent annual increase a month earlier. Imports are forecast to fall 15 percent on year after the 13.2 percent annual fall in June. Exports are called lower by 23 percent on year after the 21.4 percent decline a month earlier. The trade balance is predicted to show a surplus of $10.6 billion after the $8.25 billion surplus in June.
Also, house prices in 70 major cities in China climbed 1 percent in July from the prior year, a report from the National Development and Reform Commission showed Monday. House prices, thus rose for the second month after easing for six consecutive months. Compared to June, house prices were up 0.9 percent, which was the fifth straight monthly increase.
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