The China stock market has finished higher in two of three trading days since the end of the four-day losing streak in which it had retreated more than 60 points or 3.2 percent. Bouncing from a four-year closing low, the Shanghai Composite Index ended just above the 1,975-point plateau - and now traders are expecting a narrow trading range when the market kicks off trade on Wednesday.
The global forecast for the Asian markets continues to be mixed and flattish, thanks to continued uncertainty about the looming fiscal cliff in the United States. Caution ahead of U.S. payroll data later in the week adds to the overall sentiment. The European markets were mixed but little changed on Tuesday and the U.S. bourses were slightly lower - and the Asian markets figure to split the difference.
The SCI finished modestly higher on Tuesday following gains from the financial sector.
For the day, the index collected 15.38 points or 0.78 percent to finish at 1975.14 after trading between 1,949.46 and 1,980.12. The Shenzhen Composite Index spiked 1.3 percent to end at 743.6.
Among the actives, Huaxia Bank climbed 1.0 percent, while China Merchants Bank collected 0.7 percent, Bank of Communications added 0.2 percent, Wuliangye Yibin jumped 1.4 percent, Luzhou Lao Jiao gathered 0.4 percent and Kweichow Moutai shed 1.6 percent.
The lead from Wall Street is mildly negative as stocks showed a lack of direction on Tuesday after moving mostly lower in the previous session. The lackluster performance reflected continued uncertainty about the looming fiscal cliff.
The choppy trading came as traders kept a close eye on developments in Washington, where lawmakers are struggling to reach a deficit reduction agreement. Without action by Congress, approximately $600 billion in automatic tax increase and government spending cuts are due to go into effect at the end of the year.
House Republicans unveiled a plan Monday that they claim will reduce the deficit by $2.2 trillion over ten years, but the proposal was rejected by the White House. While the Republican plan includes $800 billion in new revenues, the higher revenues are achieved by closing loopholes rather than raising tax rates on wealthy Americans.
Democrats have claimed that the Republican plan would increase the burden on the middle class and have instead called for the Bush-era tax cuts for high-income earners to expire. President Barack Obama has indicated that any deal will have to include higher tax rates on wealthy Americans.
Analysts have suggested that lawmakers will likely continue to wrangle over how to avoid the fiscal cliff until the days leading up to the end of the year deadline.
Among individual stocks, NetFlix (NFLX) surged up 14 percent after announcing a multi-year licensing agreement with Disney (DIS) that will make the Internet television network the exclusive U.S. subscription television service for films from Walt Disney Studios.
Big Lots (BIG) also showed a strong upward move after the discount retailer reported a much narrower than expected third quarter loss. Shares of Big Lots jumped 11.5 percent.
On the other hand, shares of Pep Boys (PBY) came under pressure after the auto parts retailer reported a third quarter loss compared to a year ago profit. The company also reported weaker than expected sales. Pep Boys posted a 10.4 percent loss on the news.
The major U.S. averages were slightly lower on Tuesday as the Dow edged down 13.82 points or 0.1 percent to finish at 12,951.78, while the NASDAQ slipped 5.51 points or 0.2 percent to close at 2,996.69 and the S&P 500 dipped 2.41 points or 0.2 percent to end at 1,407.05.
In economic news, China will on Wednesday see the November results of the HSBC Services PMI; it came in at 53.5 in October.
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Market Analysis
May 22, 2026 14:46 ET Minutes of the latest Fed policy session was the highlight of the week along with survey data on the U.S. housing market. In Europe, survey data signaled the trends in the euro area private sector. Further, consumer price inflation data from the U.K. was in focus. In Asia, various economic indicators from China drew attention to the health of the economy.