Losses May Accelerate For China Stock Market

BEIJING (dpa-AFX) - The China stock market headed south again on Tuesday, one session after it had ended the two-day losing streak in which it had retreated almost 10 points or 0.3 percent. The Shanghai Composite Index now rests just above the 2,840-point plateau, and the market is in line for further damage on Wednesday.

The global forecast for the Asian markets is broadly negative, thanks to renewed concerns over interest rates - although the downside may be limited by another spike in the price of crude oil. The European markets were mixed but little changed and the U.S. bourses were sharply lower - and the Asian markets figure to follow the latter lead.

The SCI finished slightly lower on Tuesday as losses from the transportation and agricultural stocks were tempered by support from the oil companies.

For the day, the index slipped 7.18 points or 0.25 percent to finish at 2,843.68 after trading between 2,832.46 and 2,860.32. The Shenzhen Composite Index slipped 0.35 points or 0.02 percent to end at 1,814.68.

The lead from Wall Street suggests consolidation as stocks moved sharply lower on Tuesday, offsetting the rally in the previous session.

The Dow slumped 180.73 points or 1 percent to 17,529.98, while the NASDAQ plunged 59.73 points or 1.3 percent to 4,715.73 and the S&P 500 tumbled 19.45 points or 0.9 percent to 2,047.21.

The sell-off came as traders cashed in on Monday's gains, while the latest batch of U.S. economic data raised concern about the outlook for interest rates.

The Labor Department reported a bigger than expected increase in consumer prices in April as inflation climbed 0.4 percent after inching up 0.1 percent in March.

Upbeat reports on residential construction and industrial production also led to renewed speculation that the Fed could raise interest rates next month.

Atlanta Fed President Dennis Lockhart acknowledged that the Fed may raise rates next month but noted the central bank will take in a lot more data before making its decision.

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