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China Stock Market May Run Out Of Steam On Monday

The China stock market has finished higher in five straight sessions, collecting nearly 200 points or 6 percent along the way. The Shanghai Composite Index now sits just beneath the 3,700-point plateau although investors may lock in gains on Monday.

The global forecast for the Asian markets suggests a touch of upside, with stimulus optimism tempered by inflation concerns. The European markets were slightly higher and the U.S. bourses were mixed and flat - and the Asian markets figure to split the difference.

The SCI finished modestly higher on Friday following gains from the financials, resource stocks and energy producers, while the oil companies were down and the properties were mixed.

For the day, the index added 20.81 points or 0.57 percent to finish at 3,696.17 after trading between 3,634.01 and 3,699.65. The Shenzhen Composite Index gained 18.27 points or 0.75 percent to end at 2,468.66.

Among the actives, Bank of China collected 0.62 percent, while China Construction Bank rose 0.14 percent, China Merchants Bank dropped 0.88 percent, China Minsheng Bank was up 0.38 percent, Bank of Communications advanced 0.88 percent, China Life Insurance climbed 1.03 percent, Jiangxi Copper surged 6.86 percent, Aluminum Corp of China (Chalco) jumped 1.77 percent, Yanzhou Coal rallied 2.48 percent, PetroChina retreated 1.37 percent, China Petroleum and Chemical (Sinopec) tanked 2.46 percent, Anhui Conch Cement soared 5.22 percent, Huaneng Power spiked 3.05 percent, China Shenhua Energy increased 3.96 percent, Gemdale gathered 1.76 percent, Poly Developments gained 0.35 percent, China Vanke lost 0.57 percent, China Fortune Land plummeted 9.95 percent and Industrial and Commercial Bank of China was unchanged.

The lead from Wall Street is uninspired as stocks were unable to hold early gains on Friday, finishing on opposite sides of the unchanged line.

The Dow rose 1.02 points or 0.01 percent to finish at 31,494.32, while the NASDAQ added 9.11 points or 0.07 percent to end at 13,874.46 and the S&P 500 dipped 7.26 points or 0.19 percent to close at 3,906.71. For the week, the Dow rose 0.1 percent, the NASDAQ sank 1.6 percent and the S&P fell 0.7 percent.

Continued optimism about more fiscal stimulus fueled the early strength on Wall Street, as new Treasury Secretary Janet Yellen and House Speaker Nancy Pelosi, D-Calif. urged lawmakers to approve President Joe Biden's $1.9 trillion relief package.

However, buying interest waned amid a jump in treasury yields, with the yield on the benchmark ten-year note reading its highest closing level in almost a year - spurring concerns for the outlook for interest rates amid potentially higher inflation.

In U.S. economic news, the National Association of Realtors reported another unexpected increase in U.S. existing home sales in January.

Crude oil prices drifted lower Friday as worries about supply disruptions eased after most of the oil companies in Texas prepared to resume production. West Texas Intermediate Crude oil futures for March ended lower by $1.28 or 2.1 percent at $59.24 a barrel.

Closer to home, China will provide February data on prime loan rates later today; in January, the one-year rate was 3.85 percent and the five-year rate was 4.65 percent.

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