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Lower Open Predicted For China Stock Market

The China stock market has finished higher in two straight sessions, gathering more than 30 points or 1 percent along the way. The Shanghai Composite Index now sits just above the 3,225-point plateau although it's likely to head south on Wednesday.

The global forecast for the Asian markets is soft on coronavirus concerns, stimulus questions and falling oil prices. The European markets were mixed and the U.S. bourses were down and the Asian markets figure to split the difference.

The SCI finished modestly higher on Tuesday following gains from the financials, properties and energy producers.

For the day, the index gained 22.73 points or 0.71 percent to finish at 3,227.96 after trading between 3,208.49 and 3,245.30. The Shenzhen Composite Index jumped 29.47 points or 1.37percent to end at 2,173.84.

Among the actives, Industrial and Commercial Bank of China rose 0.20 percent, while China Construction Bank collected 0.33 percent, China Merchants Bank advanced 0.96 percent, China Life Insurance shed 0.62 percent, Ping An Insurance eased 0.07 percent, PetroChina added 0.22 percent, China Shenhua Energy gained 0.32 percent, Gemdale climbed 1.17 percent, Poly Developments jumped 1.16 percent, China Vanke rallied 0.71 percent and Bank of China and China Petroleum and Chemical (Sinopec) were unchanged.

The lead from Wall Street is negative as stocks moved mostly lower on Tuesday, largely offsetting the upward move seen in the previous session.

The Dow dropped 205.49 points or 0.77 percent to finish at 26,379.28, while the NASDAQ sank 134.18 points or 1.27 percent to end at 10,402.09 and the S&P 500 fell 20.97 points or 0.65 percent to finish at 3,218.44.

The pullback by stocks came as traders kept an eye on developments in Washington after Republicans unveiled their version of a new coronavirus relief bill. The GOP bill includes popular provisions like another $1,200 stimulus payment to American as well as more funding for the Paycheck Protection Program.

However, the legislation also slashes unemployment benefits and provides liability protections for businesses and doctors, which could lead to an impasse in negotiations with Democrats.

Negative sentiment was also generated by a report from the Conference Board showing consumer confidence fell more than expected in July.

Traders were also looking ahead to today's Federal Reserve's monetary policy announcement. While the Fed is widely expected to leave interest rates unchanged, traders will look to the accompanying statement for clues about future plans to provide additional economic stimulus.

Crude oil futures settled lower on Tuesday amid concerns about the outlook for near term energy demand due to the surge in coronavirus cases and fears of fresh lockdown measures. West Texas Intermediate Crude oil futures for September slid $0.56 or 1.4 percent at $41.04 a barrel.

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