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Oversold China Stock Market Due For Support

The China stock market has moved lower in consecutive trading days, surrendering more than 80 points or 2.6 percent along the way. The Shanghai Composite Index now rests just beneath the 2,930-point plateau although it figures to bounce higher on Wednesday.

The global forecast for the Asian markets is mixed and flat on concerns over the outlook for interest rates. The European markets were down and the U.S. bourses were mixed and the Asian markets are tipped to follow the latter lead.

The SCI finished slightly lower on Tuesday as losses from the financials and oil and insurance companies were mitigated by support from the property sector.

For the day, the index eased 5.13 points or 0.17 percent to finish at 2,928.23 after trading between 2,912.81 and 2,937.76. The Shenzhen Composite Index added 3.31 points or 0.21 percent to end at 1,558.11.

Among the actives, Industrial and Commercial Bank of China shed 0.18 percent, while China Merchants Bank fell 0.76 percent, China Construction Bank lost 0.80 percent, China Life Insurance added 0.39 percent, Ping An Insurance skidded 1.20 percent, PetroChina sank 0.59 percent, China Petroleum and Chemical (Sinopec) tumbled 1.31 percent, China Shenhua Energy slid 0.42 percent, Gemdale rose 0.32 percent, Poly Developments gained 0.30 percent and Bank of China and China Vanke were unchanged.

The lead from Wall Street is cautiously optimistic as stocks opened lower on Tuesday but recovered to finish mixed.

The Dow shed 22.65 points or 0.08 percent to 26,783.49, while the NASDAQ added 43.35 points or 0.54 percent to 8,141.73 and the S&P 500 rose 3.68 points or 0.12 percent to 2,979.63.

Traders seemed reluctant to make significant moves ahead of Congressional testimony by Federal Reserve Chairman Jerome Powell later today. The Fed chief is not likely to specifically lay out the central bank's plans to lawmakers, but traders will analyze his comments for clues about the outlook for rates.

Wednesday will also see the release of the minutes of the Fed's last monetary policy meeting, which may shed additional light on the central bank's decision to make notable changes to its accompanying statement.

Crude oil futures settled higher Tuesday as traders weighed crude demand and supply prospects ahead of weekly inventory data. West Texas Intermediate Crude oil futures for August ended up $0.17 or 0.3 percent at $57.83 a barrel.

Closer to home, China will on Wednesday release consumer and producer price data for June later this morning. Consumer prices are expected to rise 2.7 percent on year, unchanged from the previous month - while producer prices are predicted to slow to an annual 0.3 percent from 0.6 percent in May.

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