Soft Start Seen For Shanghai Stocks

(RTTNews) - The China stock market has tracked lower in five straight sessions, slumping more than 125 points or 3.8 percent along the way. The Shanghai Composite Index now sits just beneath the 3,265-point plateau and it's likely to open under pressure again on Wednesday.

The global forecast for the Asian markets is mixed to lower on renewed concerns over the health of the financial systems. The European markets were mixed and little changed and the U.S. bourses were sharply lower and the Asian markets figure to split the difference.

The SCI finished modestly lower on Tuesday as losses from the resource stocks and properties were mitigated by support from the financials and oil companies.

For the day, the index lost 10.54 points or 0.32 percent to finish at 3,264.87 after trading between 3,229.45 and 3,288.57. The Shenzhen Composite Index declined 34.61 points or 1.69 percent to end at 2,014.58.

Among the actives, Industrial and Commercial Bank of China collected 0.64 percent, while Bank of China strengthened 1.38 percent, China Construction Bank jumped 1.59 percent, China Merchants Bank climbed 1.28 percent, Bank of Communications spiked 2.18 percent, China Life Insurance rallied 1.74 percent, Jiangxi Copper shed 0.49 percent, Yankuang Energy dropped 0.98 percent, PetroChina surged 4.10 percent, China Petroleum and Chemical (Sinopec) soared 3.32 percent, Huaneng Power improved 1.68 percent, China Shenhua Energy lost 0.42 percent, Gemdale eased 0.12 percent, Poly Developments fell 0.43 percent, China Vanke tanked 2.68 percent, China Fortune Land tumbled 2.02 percent and Aluminum Corp of China (Chalco) was unchanged.

The lead from Wall Street is broadly negative as the major averages opened slightly lower on Tuesday but accelerated deeper into the red as the day progressed, ending near session lows.

The Dow plunged 344.57 points or 1.02 percent to finish at 33,530.83, while the NASDAQ tumbled 238.05 points or 1.98 percent to close at 11,799.16 and the S&P 500 sank 65.4 points or 1.58 percent to end at 4,071.63.

The sell-off on Wall Street reflected a negative reaction to quarterly results from First Republic (FRC), with the regional bank plunging by 49.4 percent. The steep drop came after the company reported a loss of more than $100 billion in deposits in the first quarter, renewing concerns about turmoil in the banking sector.

Results for UPS Inc. (UPS) also disappointed, while General Motors (GM), PepsiCo (PEP), McDonald's (MCD) and 3M (MMM) reported better than expected quarterly earnings.

In economic news, the Conference Board reported that consumer confidence deteriorated more than expected in April. Also, the Commerce Department said new home sales unexpectedly spiked to their highest level in a year in March.

Oil prices fell sharply on Tuesday amid concerns over the outlook for energy demand due to fears of a global economic slowdown, while the dollar's rise weighed as well. West Texas Intermediate Crude oil futures for June ended lower by $1.69 or 2.2 percent to $77.07 per barrel.