FX.co ★ China Stock Market May Find Traction On Thursday

Over the past three trading sessions, the China stock market has faced a downward trend, losing nearly 35 points, or 1.1%. The Shanghai Composite Index (SCI) now sits just below the 3,120-point mark, but there is potential for stabilization on Thursday.

Global market forecasts indicate a positive outlook for the Asian markets, driven by rising optimism regarding interest rates. This sentiment follows gains in European and U.S. markets, which likely suggests a similar trajectory for Asian stocks.

On Wednesday, the SCI recorded a modest decline, influenced by losses in resource stocks, gains in properties, and a mixed performance in the financial sector. The index dropped 25.87 points, or 0.82%, concluding the day at 3,119.90, with trading ranges between 3,117.93 and 3,142.97. The Shenzhen Composite Index also decreased, shedding 13.42 points, or 0.76%, to close at 1,759.58.

Examining individual performers, Industrial and Commercial Bank of China saw a minor increase of 0.19%, and Bank of China rose by 0.45%. Conversely, China Merchants Bank and China Life Insurance both fell by 0.82%, Bank of Communications declined by 0.29%, and Jiangxi Copper retreated by 1.61%. Aluminum Corporation of China (Chalco) plunged by 3.18%, while Yankuang Energy advanced by 0.85%, and PetroChina lost 0.40%. China Petroleum and Chemical (Sinopec) shed 0.63%, and Huaneng Power experienced a significant drop of 3.90%. China Shenhua Energy dipped by 0.25%, while Gemdale rallied by 1.53%, Poly Developments soared by 3.03%, China Vanke surged by 3.62%, and China Construction Bank remained unchanged.

Wall Street presented a strong lead, with major averages opening higher and staying in positive territory throughout the session, finishing near their daily highs. The Dow Jones Industrial Average rallied by 349.89 points, or 0.88%, reaching 39,908.00. Meanwhile, the NASDAQ Composite jumped by 231.21 points, or 1.40%, to close at 16,742.29, and the S&P 500 increased by 61.47 points, or 1.17%, ending at 5,308.15.

Wall Street's rally was bolstered by a Labor Department report indicating that U.S. consumer prices rose slightly less than anticipated in April. After a hotter-than-expected producer price inflation report on Tuesday, this consumer price data reinforced optimism about the outlook for interest rates.

Additionally, the Commerce Department reported that U.S. retail sales remained flat in April, contrary to forecasts predicting a 0.4% increase.

In commodities, crude oil prices increased on Wednesday, supported by softer inflation data and a report showing a larger-than-expected decrease in U.S. crude inventories last week. West Texas Intermediate Crude oil futures for June rose by $0.61, or 0.78%, to settle at $78.63 per barrel.