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China Stock Market May See Continued Selling Pressure

The China stock market on Wednesday snapped the two-day winning streak in which it had advanced almost 100 points or 3.3 percent. The Shanghai Composite Index now rests just beneath the 2,910-point plateau and it may take further damage on Thursday.

The global forecast for the Asian markets is negative on continuing concerns over world trade, plus a deep drop in crude oil prices. The European and U.S. markets were down and the Asian markets figure to open in similar fashion.

The SCI finished modestly lower on Wednesday following losses from the financial shares, property stocks and oil and insurance companies.

For the day, the index slipped 16.34 points or 0.56 percent to finish at 2,909.38 after trading between 2,903.88 and 2,924.70. The Shenzhen Composite Index fell 9.83 points or 0.64 percent to end at 1,528.40.

Among the actives, Industrial and Commercial Bank of China shed 0.52 percent, while Bank of China lost 0.80 percent, China Construction Bank fell 0.68 percent, China Merchants Bank dipped 0.25 percent, China Life Insurance dropped 1.00 percent, Ping An Insurance skidded 1.44 percent, PetroChina and Poly Developments both sank 0.70 percent, China Petroleum and Chemical (Sinopec) retreated 0.75 percent, China Shenhua Energy added 0.52 percent, Gemdale declined 1.15 percent, China Vanke was down 1.16 percent and CITIC Securities contracted 1.33 percent.

The lead from Wall Street is soft as stocks turned in a lackluster performance on Wednesday before ending slightly lower, extending losses from the previous session.

The Dow shed 43.68 points or 0.17 percent to finish at 26,004.83, while the NASDAQ lost 29.85 points or 0.38 percent to 7,792.72 and the S&P 500 fell 5.88 points or 0.20 percent to 2,879.84.

The weakness on Wall Street came as traders weighed lingering trade concerns against optimism about an interest rate cut by the Federal Reserve.

The U.S.-China trade conflict has moved back into the spotlight ahead of the G20 summit later this month - however, a report showing tame inflation has further fueled expectations that the Federal Reserve will cut interest rates in the near future.

Crude oil futures plunged sharply on Wednesday after the Energy Information Administration showed a jump in U.S. crude stockpiles for a second straight week. West Texas Intermediate Crude oil futures for July ended down $2.13 or 4 percent at $51.14 a barrel, the lowest settlement price since mid-January.

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