FX.co ★ Rebound Anticipated For China Stock Market

On Wednesday, the China stock market took another downturn, following a brief respite that ended a four-day losing streak. During the slide, the market had declined by over 75 points or approximately 2.5 percent. The Shanghai Composite Index now rests just below the 2,940-point mark but is anticipated to rise again on Thursday.

Globally, the outlook for Asian markets is positive, buoyed by technology shares in anticipation of critical inflation data. The European and U.S. markets experienced gains and are expected to set a similar opening trend for Asian markets.

The Shanghai Composite Index (SCI) closed slightly down on Wednesday. Losses in the resource and property sectors were partially offset by gains in the financial sector. The SCI declined by 20.01 points or 0.58 percent to end at 2,939.36, with trading ranging between 2,935.33 and 2,958.86. Meanwhile, the Shenzhen Composite Index fell 5.49 points or 0.35 percent, closing at 1,582.58.

In sector-specific movements:

- Industrial and Commercial Bank of China rose by 1.01 percent.

- Bank of China increased by 0.21 percent.

- China Construction Bank gained 0.91 percent.

- China Merchants Bank was up by 0.61 percent.

- Bank of Communications increased by 0.14 percent.

- China Life Insurance rallied, gaining 2.29 percent.

- Jiangxi Copper dropped by 3.42 percent.

- Aluminum Corp of China (Chalco) plunged by 6.20 percent.

- Yankuang Energy fell sharply by 6.84 percent.

- PetroChina fell by 2.91 percent.

- China Petroleum and Chemical (Sinopec) retreated by 1.83 percent.

- Huaneng Power dropped by 4.10 percent.

- China Shenhua Energy decreased by 3.89 percent.

- Gemdale declined by 3.65 percent.

- Poly Developments lost 0.47 percent.

- China Vanke slipped by 0.89 percent.

Wall Street provided a broadly positive lead, with major indices starting the day flat but gaining momentum to close near their session highs. The Dow Jones Industrial Average surged by 429.39 points or 1.09 percent to finish at 39,721.36. The NASDAQ Composite Index soared by 218.16 points or 1.18 percent to a record closing of 18,647.45. The S&P 500 also reached a record high, jumping 56.93 points or 1.02 percent to close at 5,633.91.

The rally was primarily driven by strong performance among technology stocks, especially evident in the NASDAQ's gains. Investors are optimistic about the outlook for interest rates ahead of the imminent release of key consumer price inflation data. Federal Reserve Chair Jerome Powell's recent congressional testimony indicated that favorable data would bolster the central bank's confidence in inflation moving sustainably towards the 2 percent target, potentially leading to an interest rate cut.

In the commodities market, oil futures settled higher on Wednesday following data that indicated a larger-than-expected decline in U.S. crude inventories last week. West Texas Intermediate Crude oil futures for August closed up by $0.69, reaching $82.10 per barrel.