RTTNews - One day after snapping the four-day winning streak in which it had collected more than 80 points or 2.8 percent, the China stock market turned higher again on Wednesday as it touched a fresh one-year closing high. The Shanghai Composite Index cracked the 3,000-point plateau, and now analysts say the market could extend its gains at the opening of trade on Thursday.

The global forecast for the Asian markets is cautiously optimistic, thanks to better than expected economic data and sound corporate news. Strength among the commodities and oil companies are expected to push the regional bourses higher - especially after the European markets finished sharply higher and the U.S. bourses also ended with modest gains.

The SCI finished sharply higher on Wednesday, fueled by gains among the financials and the property stocks.

For the day, the index jumped 48.79 points or 1.65 percent to close at 3,008.15 after trading between 2,947.69 and 3,009.71. The Shenzhen Index was up 282.14 points or 2.44 percent to finish at 11,848.75 points for a combined turnover of 231 billion yuan.

Among the gainers, BEIH-Property Co. rose by daily 10 percent limit, while China Vanke was up 3.45 percent, Industrial and Commercial Bank of China gained 1.11 percent, Ping An jumped 5.68 percent, Bank of Communications gained 5.8 percent, China Merchants Bank rose 2.8 percent and Poly Real Estate Group added 3.8 percent.

The lead from Wall Street is positive, although stocks were unable to hold onto their strong gains, steadily ceding ground over the course of Wednesday's session after moving sharply higher in morning trading. Nonetheless, the major averages all finished in positive territory amid yet another low volume session.

Early gains came on the heels of a report from the Institute for Supply Management, which said its index of activity in the manufacturing rose to 44.8 in June from 42.8 in May, although a reading below 50 indicates a contraction in the sector. The index came roughly in line with the expectations of economists, who forecast a reading of 44.6.

Separately, housing industry group NAR said its pending home sales index rose 0.1 percent to 90.7 in May from an upwardly revised reading of 90.6 in April. Economists had been expecting the index to come in unchanged compared to the 90.3 originally reported for the previous month.

The day's optimism was mitigated by data from the U.S. Commerce Department revealing that construction spending fell 0.9 percent in May following a revised 0.6 percent increase in the previous month. Economists had expected construction spending to fall by 0.6 percent compared to the 0.8 percent increase that was originally reported for April.

Meanwhile, ADP said that non-farm private employment fell by 473,000 jobs in June following a revised decrease of 485,000 jobs in May. Economists had expected a decrease of 394,000 jobs compared to the loss of 532,000 jobs originally reported for the previous month. While employment fell by more than expected, the decrease in jobs marked the smallest drop since October of 2008, when employment fell by 352,000 jobs.

On the earnings front, General Mills (GIS) reported adjusted fourth-quarter net income of $0.86, up 18 percent from $0.73 in the same period last year. Analysts expected the firm to report earnings of $0.80 per share. Shares of the consumer foods manufacturer climbed by 3.9 percent on the session as traders reacted to the better-than-expected earnings.

The major averages continued to give back ground going into the close but were able to finish in the green by comfortable margins. The Dow closed up by 57.06 points or 0.7 percent at 8,504.06, the NASDAQ rose by 10.68 points or 0.6 percent to 1,845.72 and the S&P 500 advanced by 4.01 points or 0.4 percent to 923.33.

In economic news, China's Purchasing Managers' Index for the manufacturing sector stayed above the threshold limit for the fourth consecutive month, pointing towards a gradual expansion in the sector, driven by stimulus measures, survey data revealed on Wednesday.

The manufacturing PMI rose to 53.2 in June from 53.1 in the prior month, reports said citing the China Federation of Logistics and Purchasing. A reading above 50 indicates an expansion in the manufacturing sector, while a level below 50 signals contraction. Among the sub-indices, output and export orders improved in June. The export orders index climbed to 51.4 in June from 50.1 in May, while the measure for new orders dropped to 55.5 from 56.2 in May.

Also, the CLSA Asia-Pacific Markets PMI also rose to 51.8 in June from 51.2 last month. The June reading was the highest since July 2008. During January to May, the Chinese total investment in fixed assets increased 32.9 percent to 5.35 trillion yuan. At the end of May, outstanding renminbi loans reached 36.21 trillion yuan, up 30.6 percent from the previous year.

In corporate news, General Motors China reported that it and its joint ventures sold 814,442 vehicles in China in the first half of 2009, up 38.0 percent from the first six months of 2008. For the first six months as a whole, GM China's SAIC-GM-Wuling joint venture sales totaled 524,598 units, up 49.9 percent from the first half of 2008.

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