RTTNews - The China stock market has stretched its winning streak to three sessions now, gathering more than 215 points or 7 percent in the process. The Shanghai Composite Index has closed just shy of the 3,000-point plateau, although investors anticipate continued resistance at that level when the market opens for business on Tuesday.
The global forecast for the Asian markets provides little in the way of guidance as weakness among the financials and retail stocks is expected to be offset by gains among the oil and steel shares. The European markets finished on a positive note, while the U.S. markets ended little changed - and the Asian markets also are likely to trade in mixed fashion but may fall prey to profit taking following strong rallies on Monday.
The SCI finished sharply higher on Monday, riding solid gains among the financials and the commodities.
For the day, the index collected 32.66 points or 1.1 percent to close at 2,993.43 after trading between 2,944.92 and 3,004.90. The Shenzhen Index gained 183.78 points or 1.55 percent to finish at 12,075.80 for a combined turnover of 218.87 billion yuan. Gainers outnumbered losers by 711 to 137 in Shanghai and 655 to85 in Shenzhen.
Among the gainers, Sichuan Western Resources Holding and Wuhu Jingcheng Copper Share both were up by the daily limit of 10 percent, while China Petroleum and Chemical Corporation (Sinopec) gained 2.21 percent and Jiangxi Copper jumped 6.89 percent.
The lead from Wall Street is virtually flat with perhaps a touch of downside as stocks moved back to the downside over the course of the trading session on Monday, ending the day nearly unchanged after seeing some early strength. The major averages closed on opposite sides of the unchanged mark.
This morning, traders reacted to comments from a number of central bankers over the weekend at the Federal Reserve conference in Jackson Hole, Wyoming, indicating that interest rates are likely to remain fixed for some time despite some signs of economic stabilization. At the conference, Federal Reserve Chairman Ben Bernanke said, Economic activity appears to be leveling out, both in the United States and abroad. Bernanke also noted that the prospects for a return to growth in the near term appear good.
However, the optimism was partly offset by comments from economist Nouriel Roubini, who said that he sees a big risk of a double recession in an article for the Financial Times. Roubini, who predicted the magnitude of the recent financial crisis, stated that the global economy might bottom out in the second half of the year and that the economies in the U.S and other European countries might witness anemic or below trend growth for at least a couple of years.
The pullback by the markets was also partly due to comments from Sun Trust (SIT) CEO James Wells, who said that financial institutions are likely to incur further losses amid the dismal condition of the commercial real estate market.
In other news, conflicting reports have led to speculation over the health of Bernard Madoff, perpetrator of the largest Ponzi scheme in history, who may be dying of cancer at a federal prison in North Carolina. However, prison officials have refuted the cancer claim that a number of media outlets reported earlier.
The major averages saw choppy movement in late session dealing, resulting in a mixed close to kick off the week. While the Dow closed up by 3.32 points or less than a tenth of a percent at 9,509.28, the NASDAQ slipped by 2.92 points or 0.1 percent to 2,017.98 and the S&P 500 fell by 0.56 or 0.1 percent to 1,025.57.
In economic news, China's economy may expand 8 percent in 2010 supported by real estate, corporate investment and export growth, central bank adviser Fan Gang reportedly said on Monday. According to a report carried out by the Shanghai Securities News, Fan said the Chinese economy had stabilized. He also said a recovery trend was underway.
Also, Chinese Premier Wen Jiabao said on Monday that the government will stick to its stimulative measures as the economy, while showing a better performance, is still facing various uncertainties.
There are still a lot of unstable and uncertain factors ahead and the economic situation ahead is still very grave, although both the world economy and the national economy are making positive changes now, the government's official Web site quoted Wen as saying during a trip to east China's Zhejiang Province. We must clearly see that the foundations of the recovery are not stable, not solidified and not balanced. We cannot be blindly optimistic.
In corporate news, China Nepstar Chain Drugstore announced that its second quarter net income attributable to ordinary shareholders was RMB 30.13 million or US$4.4 million, compared to net income of RMB 56.06 million in the year ago quarter. Earnings per American depositary share for the quarter were RMB 0.28 or US$0.04, compared to RMB 0.52 last year.
The total number of outstanding ordinary shares of the Company as of June 30, 2009 was 208 million. The weighted average number of ADSs for the second quarter of 2009 was 105 million. Revenue for the quarter was RMB 534.12 million or US$78.20 million, compared to revenue of RMB 585.15 million for the same period in 2008, and revenue of RMB497 million for same period in 2008 on a pro forma basis.
Also, China Digital TV Holding said it has signed an exclusive contract with Jinzhong Broadcasting Television Network to provide proprietary cross-platform set-top box software solutions on all digital TV set-top boxes in the operator's jurisdiction covering approximately 300 thousand cable subscribers. China Digital TV's set-top box software solutions allow cable operators to offer applications such as video-on-demand, time shifting and TV gaming under a unified interface and to expand and upgrade their services across set-top boxes provided by multiple manufacturers.
Finally, Aluminum Corp of China Ltd (Chalco) saw a net loss of 1.63 billion yuan for the second quarter, posting a loss for the third consecutive quarter. The loss was bigger than an average forecast of a 445 million yuan loss compared with a revised profit of 1.14 billion yuan in the same period last year. For the first half of 2009, Chalco posted a loss of 3.52 billion yuan against a revised net profit of 2.39 billion yuan a year ago and a forecast of 2.4 billion yuan loss.
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