China Stock Market Due For Consolidation On Tuesday

The China stock market has finished higher in three straight session, gathering almost 130 points or 3.9 percent in that span. The Shanghai Composite Index now rests just above the 3,500-point plateau although investors may cash in on Tuesday.

The global forecast for the Asian markets is soft, with several regional bourses ripe for profit taking, while an uptick in coronavirus cases may fuel the weak sentiment. The European markets were up and the U.S. bourses were down and the Asian markets figure to follow the latter lead.

The SCI finished modestly higher on Monday as gains from the resource stocks were limited by weakness from the financials and properties.

For the day, the index advanced 29.89 points or 0.86 percent to finish at 3,502.96 after trading between 3,457.21 and 3,511.66. The Shenzhen Composite Index spiked 57.17 points or 2.45 percent to end at 2,386.54.

Among the actives, Industrial and Commercial Bank of China collected 0.40 percent, while Bank of China shed 0.31 percent, China Construction Bank lost 0.48 percent, China Merchants Bank tumbled 1.77 percent, Bank of Communications fell 0.22 percent, China Life Insurance skidded 1.46 percent, Jiangxi Copper skyrocketed 7.17 percent, Aluminum Corp of China (Chalco) surged 4.13 percent, Yanzhou Coal climbed 1.19 percent, Anhui Conch Cement jumped 1.28 percent, PetroChina advanced 0.96 percent, China Shenhua Energy eased 0.11 percent, Gemdale plummeted 4.59 percent, Poly Developments plunged 3.35 percent, China Vanke tanked 3.21 percent and China Petroleum and Chemical (Sinopec) and China Minsheng Bank were unchanged.

The lead from Wall Street is broadly negative as stocks shook off a steady start on Monday and headed sharply lower as the day progressed, cutting into recent gains.

The Dow tumbled 382.59 points or 1.25 percent to finish at 30,223.89, while the NASDAQ dropped 189.83 points or 1.47 percent to end at 12,698.45 and the S&P 500 sank 55.42 points or 1.48 percent to close at 3,700.65.

Upward momentum to start the New Year contributed to the initial strength on Wall Street, although buying interest waned shortly after the open. The subsequent pullback partly reflected profit taking after the Dow and the S&P 500 reached new record intraday highs.

Traders also were reluctant to push stocks higher amid uncertainty ahead of two key Senate runoffs in Georgia later today. Their outcome will determine which party controls the Senate and could have a major impact on what President-elect Joe Biden is able to accomplish.

The sharp pullback reflected concerns about the recent spike in coronavirus cases in several parts of the world, with a new strain of the virus being detected in the U.S. for the first time. Other countries, including the United Kingdom and Japan, are taking strong lockdown measures.

On the U.S. economic front, the Commerce Department reported a continued increase in construction spending in November.

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