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Bargain Hunting May Lift China Stock Market

The China stock market has finished lower in two of three trading days since the end of the two-day winning streak in which it had advanced almost 90 points or 2.9 percent. The Shanghai Composite Index now rests just above the 3,215-point plateau and it may see a mild recovery on Tuesday.

The global forecast for the Asian markets suggests slight upside, thanks mainly to a surge in crude oil prices. The European and U.S. markets were mixed and little changed and the Asian markets are expected to open in similar fashion.

The SCI finished sharply lower on Monday following heavy losses from the properties, financials and insurance companies, although the oil stocks offered mild support.

For the day, the index tumbled 55.75 points or 1.70 percent to finish at 3,215.04 after trading between 3,206.88 and 3,279.49. The Shenzhen Composite Index dropped26.91 points or 1.5 percent to end at 1,751.91.

Among the actives, Industrial and Commercial Bank of China retreated 2.51 percent, while Bank of China dropped 2.48 percent, China Merchants Bank sank 3.33 percent, China Construction Bank dropped 3.28 percent, China Life Insurance plunged 4.78 percent, Ping An Insurance skidded 2.34 percent, PetroChina climbed 0.91 percent, China Petroleum and Chemical (Sinopec) advanced 1.02 percent, China Shenhua Energy lost 2.34 percent, Gemdale cratered 6.11 percent, Poly Developments tumbled 5.63 percent, China Vanke plummeted 6.26 percent and CITIC Securities fell 2.90 percent.

The lead from Wall Street is ambiguous as stocks showed a lack of direction on Monday, bouncing back and forth across the unchanged line before ending mixed.

The Dow shed 48.49 points or 0.18 percent to finish at 26,511.05, while the NASDAQ added 17.21 points or 0.22 percent to 8,015.27 and the S&P 500 rose 2.94 points or 0.10 percent to 2,907.97.

The choppy trading on Wall Street came as traders seemed reluctant to make significant moves ahead of earnings news in the coming days from the likes of Coca-Cola (KO), Procter & Gamble (PG), Boeing (BA), Facebook (FB), Microsoft (MSFT), Amazon (AMZN), Intel (INTC), and Exxon Mobil (XOM).

The Easter Monday holiday, which has kept many overseas markets closed on the day, also contributed to light trading activity.

In economic news, the National Association of Realtors reported a significant pullback in existing home sales in March after sales had reached their highest level in almost a year in February.

Crude oil prices rose sharply on Monday after the U.S. ended the waivers it had offered to major importers of Iranian oil. West Texas Intermediate Crude oil futures soared to $65.91 a barrel at one stage, gaining more than 3 percent, before settling at $65.70 on expiration day, up $1.70 or 2.66 percent.

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