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Rally May Stall For China Stock Market

The China stock market has finished higher in four straight sessions, rising more than 130 points or 4.5 percent along the way. The Shanghai Composite Index now rests just above the 2,875-point plateau although it may run out of steam on Monday.

The global forecast for the Asian markets is soft, with profit taking likely after last week's rally. The European and U.S. markets were down on Friday and the Asian markets are likely to follow suit.

The SCI finished modestly higher as gains from the oil companies were sapped by weakness from the financial shares and properties.

For the day, the index gained 9.45 points or 0.33 percent to finish at the daily high of 2,875.96 after moving as low as 2,838.77. The Shenzhen Composite Index added 8.93 points or 0.52 percent to end at 1,736.10.

Among the actives, Industrial and Commercial Bank of China skidded 1.09 percent, while Bank of China, China Construction Bank dropped 0.90 percent, China Merchants Bank shed 0.92 percent, China Life Insurance tumbled 1.48 percent, Ping An Insurance lost 0.60 percent, PetroChina rose 0.19 percent, China Petroleum and Chemical (Sinopec) gained0.64 percent, China Shenhua Energy sank 0.55 percent, Gemdale eased 0.08 percent, Poly Developments declined 1.03 percent and China Vanke retreated 1.43 percent.

The lead from Wall Street is negative as stocks spent most of Friday's session in the red, handing back gains from earlier in the week.

The Dow shed 277.26 points or 0.94 percent to end at 29,102.51, while the NASDAQ lost 51.64 points or 0.54 percent to 9,520.51 and the S&P 500 fell 18.07 points or 0.54 percent to 3,327.71.

Profit taking fueled to weakness on Wall Street as traders looked to cash in after the strong upward move in previous days. Lingering concerns about the coronavirus also re-emerged after traders shrugged off the worries about the outbreak to drive stocks higher.

However, selling pressure was subdued following the release of the Labor Department report that showed stronger than expected job growth in January.

Crude oil futures closed lower on Friday as worries about the spread of the coronavirus and its impact on the global economy and energy demand weighed on oil prices. West Texas Intermediate crude oil futures for March ended down $0.63 or 1.2 percent at $50.32 a barrel.

Closer to home, China will release January numbers for consumer and producer prices and new yuan loans later today. Consumer prices are expected to rise 4.9 percent on year, up from 4.5 percent in December. Producer prices are called flat after sinking 05 percent in the previous month. New loans are expected to come in at 3,100 billion yuan, up from 1,140 billion yuan a month earlier.

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