China Shares May Take Further Damage On Monday

(RTTNews) - The China stock market on Friday wrote a finish to the two-day winning streak in which it had jumped almost 70 points or 2 percent. The Shanghai Composite Index now sits just above the 3,870-point plateau and it's likely to open under water again on Monday.

The global forecast for the Asian markets is soft, with geopolitical concerns in the Middle East likely to weigh. The European and U.S. markets were mostly lower and the Asian markets figure to open in similar fashion.

The SCI finished slightly lower on Friday as losses from the financials and oil companies were offset by support from the properties and resource stocks.

For the day, the index eased 4.71 points or 0.12 percent to finish at 3,870.60 after trading between 3,866.54 and 3,892.74. The Shenzhen Composite Index slipped 6.17 points or 0.25 percent to end at 2,462.49.

Among the actives, Industrial and Commercial Bank of China shed 0.40 percent, while Bank of China fell 0.36 percent, Agricultural Bank of China lost 0.55 percent, China Merchants Bank tumbled 1.76 percent, Bank of Communications tanked 1.93 percent, China Life Insurance skidded 1.11 percent, Jiangxi Copper surged 6.79 percent, Aluminum Corp of China (Chalco) rallied 2.68 percent, Yankuang Energy rose 0.31 percent, PetroChina sank 0.46 percent, China Petroleum and Chemical (Sinopec) dipped 0.18 percent, Huaneng Power climbed 1.04 percent, China Shenhua Energy retreated 1.36 percent, Gemdale spiked 2.43 percent, Poly Developments added 0.64 percent and China Vanke jumped 1.61 percent.

The lead from Wall Street offers little clarity as the major averages opened mixed on Friday and closed on opposite sides of the line.

The Dow dropped 273.78 points or 0.59 percent to finish at 45,834.22, while the NASDAQ gained 98.03 points or 0.44 percent to close at 22,141.10 and the S&P 500 dipped 3.18 points or 0.05 percent to end at 6,584.29.

For the week, the NASDAQ surged 2.0 percent, while the S&P 500 shot up 1.6 percent and the Dow jumped 1.0 percent.

The mixed performance on Wall Street came as traders looked ahead to the Federal Reserve's monetary policy announcement next Wednesday. With recent data showing relatively subdued inflation and a weakening labor market, the Fed is widely expected to lower interest rates by at least a quarter point.

Traders will pay close attention to the Fed's accompanying statement as well as Fed Chair Jerome Powell's post-meeting comments for clues about the likelihood of more rate cuts. Currently, the Fed is expected to lower rates by another 25 basis points at both its October and December meetings, although Powell is likely to say future rate cuts will depend on incoming economic data.

Crude oil has moved higher Friday as concerns over supply side disruptions linger, with the Russia-Ukraine war intensifying and a new conflict brewing in the Middle East. West Texas Intermediate crude for October delivery was up $0.31 or 0.50 percent at $62.68 per barrel.

Closer to home, China will release a batch of data this morning, including August numbers for industrial production, retail sales, fixed asset investment, house prices and unemployment.

Industrial production is expected to rise 5.8 percent on year, up from 5.7 percent in July. Retail sales are seen higher by an annual 3.8 percent, up from 3.7 percent a month earlier. FAI is called higher by 1.4 percent on year, easing from 1.6 percent in the previous month. House prices were down 2.8 percent on year in July, while the jobless rate was 5.2 percent.