Hopes for More China Stimulus May Support Stocks

The China market may trade in a narrow range on Wednesday, as concerns about the health of the economy are tempered by hopes of government action to lift growth.

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The Shanghai Composite Indexfell for a second day on Tuesday to close 0.29 percent lower at 2164.44. Volume declined by a third from Monday.

Market Factors:

Premier Wen Jiabao chaired two meetings Monday and Tuesday to hear opinions on the economy. Attendees included economists such as CNBC regular Qu Hongbin and CEOs for leading firms in automaking, investment, e-commerce, real estate, and alternative energy. Wen stressed that the government must urgently undertake some "visible, encouraging, real projects" in railways, municipal services, energy, telecommunications, health care, and education to boost investor confidence.

Stocks to Watch:

Transport, Energy Stocks - China will cut fuel prices from Wednesday by 400 yuan to 420 yuan ($63.24 to $66.41) per metric ton, or about 4 percent, the low end of an expected range, as the government seeks to minimize refining losses at state owned oil giants. Some of the market impact may already be reflected as the timing of the price cut had been reported.

China Southern Airlines - China's largest airline by fleet size said it expects first-half net profit to have fallen by more than 50 percent. The airline had reported a 74 percent plunge in first-quarter earnings due to high jet fuel prices and slowing yuan appreciation.

Coming Up This Week:

WEDNESDAY: New Zealand Business PMI, Australian MI Inflation Expectations, Australian Unemployment Rate, Japanese Interest Rate Decision, South Korean Interest Rate Decision
THURSDAY: Indian Manufacturing Output, Indian Industrial Production, Bank of Japan Press Conference, Chinese Retail Sales, Chinese Industrial Production, Chinese GDP, Chinese Fixed Asset Investment
FRIDAY: Japanese Industrial Production, Singaporean Retail Sales, Bank of Japan Monthly Report

—By Cheng Lei, CNBC Asia Pacific