The Chinese stock market has registered gains for two consecutive sessions, amassing close to 30 points or 0.9%, positioning the Shanghai Composite slightly above the 3,430 mark. There is potential for further support as trading resumes on Thursday.
The outlook for Asian markets remains positive, buoyed by optimistic sentiments surrounding interest rates. European markets closed higher, and while U.S. markets generally followed this trend, the Asian markets are likely to reflect similar gains.
On Wednesday, the Shanghai Composite Index (SCI) saw modest increases, with the resource and property sectors showing strength. However, this was moderated by declines within the financial sector. Specifically, the index went up by 9.83 points or 0.29%, closing at 3,432.49, after fluctuating between 3,416.09 and 3,437.81. Additionally, the Shenzhen Composite Index increased by 15.75 points or 0.76%, ending the session at 2,090.92.
Active stocks included Industrial and Commercial Bank of China, which dropped 1.71%; Bank of China, down 1.54%; China Construction Bank, decreasing by 1.91%; China Merchants Bank, down 0.78%; and Agricultural Bank of China, shedding 1.58%. Conversely, Jiangxi Copper advanced by 1.45%, Aluminum Corp of China (Chalco) rose 2.74%, and China Shenhua Energy increased by 1.97%, among other movements.
Wall Street handed mixed cues, with major indices opening positively on Wednesday. However, the Dow Jones Industrial Average could not maintain its upward trajectory, falling by 99.27 points or 0.22% to close at 44,148.56. Meanwhile, the NASDAQ rose sharply by 347.65 points or 1.77%, setting a new record at 20,034.89, and the S&P 500 climbed by 49.28 points or 0.82%, finishing at 6,084.19.
This positive movement was catalyzed by the release of inflation data aligning with expectations, bolstering confidence that the Federal Reserve will proceed with a quarter-point interest rate cut.
CME Group's FedWatch Tool currently suggests a 98.6% probability that the Federal Reserve will reduce rates by 25 basis points at the upcoming December meeting.
In energy markets, oil futures ended higher on Wednesday due to the potential for EU-imposed sanctions on Russia, anticipated demand increases from China, and data indicating a rise in gasoline inventories. Specifically, West Texas Intermediate crude oil futures for January settled up by $1.70 or 2.5%, priced at $70.29 per barrel.
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