RTTNews - The China stock market on Tuesday halted the two-day losing streak in which it had shed more than 40 points or 1.4 percent. The Shanghai Composite Index is closing on resistance at 3,150 points, and now analysts are predicting that the market could crack that barrier by the opening of trade on Wednesday.
The global forecast for the Asian markets is mildly positive, following some modestly optimistic economic and corporate news out of the United States and Europe. Financials and commodities are tipped to lead the move, although lagging crude oil prices may continue to weigh. The European markets finished sharply higher, while the U.S. bourses ended with more modest gains - and the Asian markets are also forecast to move higher.
The SCI finished sharply higher on Tuesday, touching a fresh 13-month closing high. Financials led the gainers, while properties and steel stocks also ended significantly higher.
For the day, the index collected 64.6 points or 2.1 percent to close at 3,145.16 after trading between 3,088.58 and 3,147.59. The Shenzhen Index was up 330.51 points or 2.61 percent to close at 12,991.06 for a combined turnover of 280.53 billion yuan. Gainers outnumbered decliners by 795 to 67 in Shanghai and 667 to 74 in Shenzhen.
Among the gainers, Anyang Iron and Steel Group, Guangxi Liuzhou Iron and Steel Group and Guoyuan Securities all rose by the daily 10 percent limit, while Hongyuan Securities gained 6.19 percent, Industrial & Commercial Bank of China added 1.6 percent, Bank of China rose 1.4 percent, China Construction Bank gained 1.8 percent, Ping An Insurance jumped 8.9 percent and China Life Insurance added 4.8 percent.
The lead from Wall Street is cautiously optimistic as stocks were unable to sustain any clear direction for the majority of the Tuesday's session following an influx of earnings and economic figures, but some late buying interest helped the markets to a positive finish. The major averages all finished in the green by moderate margins, extending their gains for a second straight session.
On the economic front, a report released by the Commerce Department revealed that retail sales increased by a little more than expected in the month of June, although the sales growth was due in large part to higher gasoline prices. The report showed that retail sales rose 0.6 percent in June following an unrevised 0.5 percent increase in May. Economists had been expecting retail sales to increase by a somewhat more modest 0.4 percent. However, after excluding increases in gas station and motor vehicle and parts sales, retail sales actually fell 0.2 percent for the month.
In a separate report, the U.S. Labor Department revealed that producer prices, a key measure of wholesale inflation, rose 1.8 percent in June. This followed a 0.2 percent increase in the previous month. Core producer prices, which exclude food and energy prices, climbed 0.5 percent.
On the earnings front, traders largely shrugged off better than expected earnings from Goldman Sachs (GS), with some suggesting that the news was already priced in following the rally among financial stocks that was seen on Monday. Johnson & Johnson (JNJ) also beat earnings expectations but saw subdued reaction amid the day's low trading volume.
The major averages saw modest upside in late day trading and were able to creep into positive territory. The Dow closed up by 27.81 points or 0.3 percent at 8,359.49, the NASDAQ advanced by 6.52 points or 0.4 percent to 1,799.73 and the S&P 500 rose by 4.79 or 0.5 percent to 905.84.
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