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Rally Likely To Stall For China Stock Market

The China stock market has climbed higher in three straight sessions, advancing almost 100 points or 4 percent along the way. The Shanghai Composite Index now rests just above the 2,665-point plateau although the wheels are expected to come off on Wednesday.

The global forecast for the Asian markets is negative on concerns over the health of the global economy and expected continued profit taking. The European and U.S. markets were down and the Asian markets figure to follow that lead.

The SCI finished modestly higher on Tuesday as gains from the financials were offset by weakness from the properties and a mixed picture from the oil and insurance companies.

For the day, the index added 11.16 points or 0.42 percent to finish at 2,665.96 after trading between 2,644.90 and 2,666.08. The Shenzhen Composite Index gained 5.94 points or 0.43 percent to end at 1,387.49.

Among the actives, Gemdale plunged 2.49 percent, while Poly Developments plummeted 3.21 percent, China Vanke tumbled 2.33 percent, CITIC Securities advanced 0.92 percent, China Petroleum and Chemical (Sinopec) shed 0.66 percent, China Shenhua Energy added 0.63 percent, Industrial and Commercial Bank of China added 0.18 percent, Bank of Communications collected 0.68 percent, Bank of China gained 0.27 percent, China Life Insurance picked up 0.05 percent, Ping An Insurance eased 0.15 percent and PetroChina and China Construction Bank were unchanged.

The lead from Wall Street is brutal as stocks saw a substantial move to the downside on Tuesday, more than offsetting Monday's strong gains.

The Dow shed 799.36 points or 3.10 percent to 25,027.07, while the NASDAQ plunged 283.09 points or 3.80 percent to 7,158.43 and the S&P fell 90.31 points or 3.24 percent to 2,700.006.

The sharp pullback came as the yield on two-year notes rose above the yield on five-year notes, which is seen as an indicator of an upcoming economic slowdown. Profit taking also was a factor following Monday's strong gains.

Uncertainty about whether the 90-day trade truce will give the U.S. and China enough time to reach a long-term trade agreement also inspired traders to cash in.

Crude oil prices moved higher on Tuesday amid speculation the OPEC members will agree on a production cut. Crude oil futures for January delivery ended up $0.30 or 0.6 percent at $53.25 a barrel.

Closer to home, China will see November numbers for the services and composite indexes from Caixin later this morning; in October, their scores were 50.8 and 50.5, respectively.

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