China Stock Market May Take Further Damage On Thursday

(RTTNews) - The China stock market headed south again on Wednesday, one day after ending the four-day losing streak in which it had slumped more than 70 points or 2.4 percent. The Shanghai Composite Index now sits just above the 2,900-point plateau and it's expected to open under pressure again on Thursday.

The global forecast for the Asian markets is soft, largely due to expectations of profit taking following recent gains. The European markets were mixed and the U.S. bourses were sharply lower and the Asian markets figure to follow the latter lead.

The SCI finished sharply lower on Wednesday following losses from the financial shares and property stocks, while the resource companies were mixed.

For the day, the index dropped 30.28 points or 1.03 percent to finish at 2,902.11 after trading between 2,902.04 and 2,937.10. The Shenzhen Composite Index sank 22.20 points or 1.23 percent to end at 1,785.34.

Among the actives, Bank of China collected 0.50 percent, while China Construction Bank shed 0.47 percent, China Merchants Bank dropped 0.84 percent, Bank of Communications eased 0.17 percent, China Life Insurance tanked 2.08 percent, Jiangxi Copper added 0.30 percent, Yankuang Energy fell 0.30 percent, China Petroleum and Chemical (Sinopec) dipped 0.19 percent, Huaneng Power surged 3.59 percent, China Shenhua Energy improved 0.75 percent, Gemdale plunged 2.23 percent, Poly Developments plummeted 2.38 percent, China Vanke slumped 1.16 percent and Industrial and Commercial Bank of China, Aluminum Corp of China (Chalco) and PetroChina were unchanged.

The lead from Wall Street is broadly negative as the major averages hugged the line for most of Wednesday's session but turned sharply lower heading into the close.

The Dow plunged 475.92 points or 1.27 percent to finish at 37,082.00, while the NASDAQ tumbled 225.28 points or 1.50 percent to close at 14,777.94 and the S&P 500 slumped 70.02 points or 1.47 percent to end at 4,698.36.

The late-day sell-off on Wall Street was largely attributed to profit taking, with traders cashing in on the strong upward move seen in recent sessions.

A steep drop by shares of FedEx (FDX) also weighed on the markets, with the delivery giant plunging by 12.1 percent after the company reported weaker than expected fiscal Q2 results and lowered its full-year revenue guidance.

In economic news, the Conference Board noted a much bigger than expected improvement in U.S. consumer confidence in December, while the National Association of Realtors showed an unexpected rebound in U.S. existing home sales last month.

Oil prices climbed higher Wednesday on concerns about trade disruptions in the Middle East after attacks on vessels in the Red Sea. West Texas Intermediate Crude oil futures for January ended higher by $0.28 or 0.4 percent at $74.22 a barrel.