Losing Streak May Continue For China Stock Market

(RTTNews) - The China stock market has finished lower in back-to-back sessions, sinking more than 50 points or 1.6 percent along the way. The Shanghai Composite Index now sits just beneath the 3,040-point plateau and it's expected to open under pressure again on Friday.

The global forecast for the Asian markets is brutal on growing fears of a recession and rising interest rates. The European and U.S. markets were sharply lower and the Asian bourses are expected to open in similar fashion.

The SCI finished slightly lower on Thursday as losses from the financials and properties were mitigated by support from the resource stocks.

For the day, the index dipped 3.86 points or 0.13 percent to finish at 3,041.20 after trading between 3,026.08 and 3,076.76. The Shenzhen Composite Index eased 1.06 points or 0.05 percent to end at 1,937.20.

Among the actives, Industrial and Commercial Bank of China lost 0.46 percent, while Bank of China shed 0.65 percent, China Construction Bank skidded 1.08 percent, China Merchants Bank retreated 1.54 percent, Bank of Communications dropped 0.87 percent, China Life Insurance collected 0.92 percent, Jiangxi Copper rose 0.40 percent, Aluminum Corp of China (Chalco) added 0.50 percent, Yankuang Energy climbed 1.12 percent, PetroChina gained 0.79 percent, China Petroleum and Chemical (Sinopec) perked 0.24 percent, Huaneng Power plunged 3.30 percent, China Shenhua Energy rallied 2.51 percent, Gemdale tanked 3.11 percent, Poly Developments declined 1.37 percent, China Vanke slumped 1.78 percent, China Fortune Land plummeted3.56 percent and Beijing Capital Development tumbled 2.56 percent.

The lead from Wall Street is broadly negative as the major averages opened sharply lower on Thursday and remained deeply in the red, although they closed off of sessions lows.

The Dow tumbled 458.13 points or 1.54 percent to finish at 29,225.61, while the NASDAQ plunged 314.13 points or 2.84 percent to close at 10,737.51 and the S&P 500 dropped 78.57 points or 2.11 percent to end at 3,640.47.

The sharp pullback on Wall Street came as traders cashed in on Wednesday's gains, as the buying interest generated by the Bank of England's bond market intervention quickly evaporated. The moves by the BoE contributed to a pullback by bond yields and the U.S. dollar, inspiring traders to pick up stocks at reduced levels. But bond yields moved back to the upside, with the yield on the benchmark ten-year note partly offsetting Wednesday's 25.9 basis point plunge.

A Labor Department report showing first-time claims for U.S. jobless benefits unexpectedly fell to a five-month low last week also weighed on the markets. While the report points to continued strength in the labor market, traders may view the data as giving the Federal Reserve confidence that it can continue to aggressively raise interest rates.

Adding to the negative sentiment on Wall Street, data from Freddie Mac showed the 30-year fixed-rate mortgage averaged 6.70 percent in the week ending September 29th, up from 6.29 percent the week before.

Crude oil prices fluctuated over the course of the trading day on Thursday before closing lower on concerns about the outlook for energy demand amidst a possible global recession. West Texas Intermediate for November delivery slid $0.92 or 1.1 percent to $81.23 per barrel.

Closer to home, China will see September results for the manufacturing, non-manufacturing and composite PMIs from the National Bureau of Statistics later this morning, as well as the manufacturing PMI from Caixin. In August, the NBS manufacturing index had a score of 49.4, the non-manufacturing index was at 52.6 and the composite was at 51.7. The Caixin manufacturing index had a score of 49.5 in the previous month.