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China Stock Market May Extend Monday's Losses

The China stock market on Monday halted the five-day winning streak in which it had surged nearly 200 points or 6 percent. The Shanghai Composite Index now sits just above the 3,640-point plateau and it's expected to open under pressure again on Tuesday.

The global forecast for the Asian markets is flat to lower, with anticipated weakness from tech shares likely offset by support from crude oil prices. The European markets were slightly lower and the U.S. bourses were mixed and the Asian markets figure to split the difference.

The SCI finished sharply lower on Monday following losses from the insurance companies and mixed performances from the financials and properties. The resource stocks offered support.

For the day, the index tumbled 53.72 points or 1.45 percent to finish at the daily low of 3,642.44 after peaking at 3,717.27. The Shenzhen Composite Index plummeted 51.99 points or 2.11 percent to end at 2,416.67.

Among the actives, Industrial and Commercial Bank of China advanced 2.48 percent, while Bank of China collected 0.62 percent, China Construction Bank jumped 2.53 percent, China Merchants Bank tumbled 1.81 percent, Bank of Communications added 0.43 percent, China Life Insurance retreated 1.64 percent, Ping An Insurance dropped 1.43 percent, Jiangxi Copper skyrocketed 9.99 percent, Aluminum Corp of China (Chalco) surged 8.46 percent, Yanzhou Coal spiked 3.58 percent, PetroChina climbed 3.01 percent, China Petroleum and Chemical (Sinopec) accelerated 6.41 percent, China Shenhua Energy soared 4.31 percent, Gemdale gained 2.23 percent, Poly Developments improved 2.01 percent, China Vanke fell 0.37 percent, China Fortune Land plummeted 9.99 percent and China Minsheng Bank was unchanged.

The lead from Wall Street is mostly weak as stocks opened in the red on Monday and largely stayed that way, although the Dow managed to break into positive territory.

The Dow rose 27.37 points or 0.09 percent to finish at 31,521.69, while the NASDAQ plummeted 341.42 points or 2.46 percent to end at 13,533.05 and the S&P 500 lost 30.21 points or 0.77 percent to close at 3,876.50.

The steep drop by the NASDAQ came as traders moved out of technology stocks amid concerns about the impact of the recent increase in treasury yields. Electric car maker Tesla (TSLA), Apple (AAPL), Microsoft (MSFT) and Amazon (AMZN) all took heavy damage.

The sell-off came as the yield on the benchmark ten-year note saw further upside, reaching its highest closing level in a year. Bond yields remain at historically low levels, but the recent increase may still spook investors already concerned that stocks are overbought.

In U.S. economic news, the Conference Board reported a bigger than expected increase by its index of leading U.S. economic indicators in January.

Crude oil prices rose sharply on Monday amid supply concerns due to a slowdown in production after last week's severe cold snap. West Texas Intermediate Crude oil futures contracts for March expired at $61.49 a barrel, gaining $2.25 or 3.8 percent for the session.

Closer to home, China will see January numbers for its house price index later today; in December, prices were up 3.8 percent on year.

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