China Stocks Fall to Three-Month Low as Hong Kong Rally Fizzles

China’s stocks fell for a third day, sending the benchmark index below the key 2,800 level, amid concern rebounding fuel prices will hurt earnings of transportation companies and provide another potential drag to the slowing economy.

The Shanghai Composite Index dropped 0.9 percent to the lowest level in almost three months. China Eastern Airlines Corp. and China Southern Airlines Co. slumped more than 3 percent as Brent oil traded above $ 50 a barrel for the first time in more than six months. Hong Kong’s shares failed to sustain the biggest rally in six weeks as property developers retreated.

China’s benchmark equity gauge has tumbled 22 percent this year, the worst performer among 93 global indexes tracked by Bloomberg. For the past two weeks, the Shanghai Composite hasn’t strayed more than 51 points from 2,800. Selling has been limited by suspected buying from state-backed funds aimed at preventing the Shanghai benchmark from ending below that level, according to Shanghai Bingsheng Asset Management.

The Shanghai index traded at 2,791.98 at 10:34 a.m. The Hang Seng Index lost 0.4 percent after jumping 2.7 percent on Wednesday amid speculation the U.S. economy can withstand higher interest rates. The Hang Seng China Enterprises Index declined 0.5 percent.

Source: Bloomberg

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U.S. Stock Rally Fizzles as Dollar Tumbles, Treasuries Advance

The biggest rally in U.S. stocks in four weeks fizzled as UnitedHealth Group Inc.’s profit warning rattled the health-care sector and oil’s descent sank energy producers. The Federal Reserve’s signal that any rate increase would be gradual bolstered bonds and sent the dollar to its biggest slump in a month.

The Standard & Poor’s 500 Index slipped as UnitedHealth plunged 5.2 percent and Chevron Corp. led losses in oil stocks. Treasuries rose and the dollar fell as investors showed few signs of unease after the U.S. central bank signaled it’s likely to raise interest rates next month. European stocks rose to a three-month high, rallying with emerging markets, as the focus turned to the Fed’s plan to take a cautious approach to subsequent tightening.

Emerging markets have tumbled this year and global equities have swung between gains and losses on concern the first U.S. rate increase since 2006 would interrupt the American recovery. Now investors are gaining confidence: economic reports since the Fed’s October meeting have been encouraging, and the Fed signaled a shallow path for any increases next year as traders continue to anticipate a move in December.

The MSCI All-Country World Index advanced 0.7 percent at 12:20 a.m. in New York. The Stoxx Europe 600 Index climbed 0.4 percent and touched the highest since Aug. 19. The Standard & Poor’s 500 Index slipped 0.2 percent after its best rally in four weeks.

Source : Bloomberg