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Continued Consolidation Called For China Bourse

The China stock market on Thursday halted the three-day winning streak in which it had advanced almost 100 points or 3.1 percent. The Shanghai Composite Index now sits just above the 3,285-point plateau and it may take further damage on Friday.

The global forecast for the Asian markets is broadly negative following a record drop in U.S. GDP, denting hopes for a quick economic recovery from the Covid-19 pandemic. The European markets were down and the U.S. bourses were mixed and the Asian markets are predicted to open in the red.

The SCI finished modestly lower on Thursday following losses from the financials, properties and oil and insurance companies.

For the day, the index shed 7.73 points or 0.23 percent to finish at 3,286.82 after trading between 3,282.16 and 3,312.45. The Shenzhen Composite Index slid 9.63 points or 0.4 percent to end at 2,227.33.

Among the actives, Industrial and Commercial Bank of China shed 0.80 percent, while China Construction Bank fell 0.33 percent, China Merchants Bank skidded 1.45 percent, China Life Insurance tanked 2.19 percent, Ping An Insurance tumbled 1.64 percent, PetroChina and Bank of China dropped 0.89 percent, China Petroleum and Chemical (Sinopec) lost 0.75 percent, China Shenhua Energy retreated 1.34 percent, Gemdale rose 0.14 percent, Poly Developments sank 1.77 percent and China Vanke was down 0.85 percent.

The lead from Wall Street is mostly soft as stocks opened lower on Thursday and mostly stayed that way, although the NASDAQ managed to climb into the green.

The Dow shed 225.92 points or 0.85 percent to finish at 26,313.65, while the NASDAQ added 44.87 points or 0.43 percent to end at 10,587.81 and the S&P 500 lost 12.22 points or 0.38 percent to close at 3,246.22.

The early sell-off on Wall Street came following a report from the Commerce Department report showing a record contraction in U.S. economic activity in the second quarter. Consumer spending led the decrease as the coronavirus-induced lockdowns forced consumers to stay at home.

A separate report from the Labor Department showed initial jobless claims increased for the second straight week in the week ended July 25th.

Crude oil futures settled lower on Thursday as worries about energy demand outlook resurfaced after data showed a sharp contraction in U.S. GDP and an uptick in unemployment claims and amid a continued surge in coronavirus cases across the world. West Texas Intermediate Crude oil futures for September ended lower by $1.35 or 3.3 percent at $39.92 a barrel.

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