The China stock market has finished higher now in consecutive trading sessions, collecting more than 80 points or 3.3 percent along the way. Winners in nine of the previous 10 sessions, the Shanghai Composite Index is flirting with resistance at 2,400 points - but analysts are predicting that the market will pull back at the opening of trade on Monday.
The global forecast for the Asian markets is fairly pessimistic, thanks to downbeat economic data out of the United States and a firmly negative lead from the European and American stock markets. Automobile stocks may be in focus on Monday after reports that Rick Wagoner will step down as General Motors Chairman and CEO in order to secure continued government aid for the embattled American auto maker.
The SCI finished modestly higher on Friday, boosted by gains among the steel companies while the financial stocks ended mixed.
For the day, the index added 12.74 points or 0.54 percent to close at 2374.44 after trading between 2,361.09 and 2,392.77. The Shenzhen Index rose 0.6 percent to finish at 778.54.
Among the actives, Industrial and Commercial Bank of China (ICBC) lost 1.00 percent, while China Construction Bank added 3.57 percent, Baoshan Iron & Steel advanced 3.5 percent and Wuhan Iron & Steel jumped 8.7 percent.
The lead from Wall Street is decidedly negative as investors cashed in on some of the recent gains, causing weakness to prevail throughout Friday's trading session. Some of the weakness came as investors digested mixed economic news and kept a close eye on a meeting between President Obama and the CEOs of the nation's biggest banks.
The White House has confirmed that Wagoner will step down from his posts at GM, which has posted losses of $82 billion in the past four years and almost ran out of capital towards the end of 2008 before it received an emergency loan from the government. GM has since said that additional funding from the government would be required to continue operations and the Obama administration confirmed on Sunday that an additional loan may be provided - but Wagoner's resignation was a condition of the agreement.
In economic news, the Commerce Department released its report on personal income and spending in February, showing that spending increased for the second consecutive month. Personal spending rose 0.2 percent in February following an upwardly revised 1.0 percent increase in January. The increase was in line with the expectations of economists. Also, personal income edged down 0.2 in February after a downwardly revised 0.2 percent increase in the previous month. Economists had been expecting a slightly more modest 0.1 percent decrease.
The final reading of the Reuters/University of Michigan's consumer sentiment index for March was also released, showing a revised reading of 57.3. Economists had expected the consumer sentiment index to be lifted to 56.8 from the mid-month reading of 56.6.
Meanwhile, President Obama met with the CEOs of the country's biggest banks to discuss the economy and proposals to increase regulation of the financial system. The meeting came only days after the Obama administration revealed details on how they plan to improve the balance sheets of banks. At the close of the roundtable discussion, some of the CEOs mentioned that Obama had emphasized the need to work together to solve the financial crisis and lift the economy out of recession.
The major averages all ended the session firmly in negative territory after ending Thursday's trading at one-month closing highs. The Dow closed down 148.38 points or 1.9 percent at 7,776.18, the Nasdaq closed down 41.80 points or 2.6 percent at 1,545.20 and the S&P 500 closed down 16.92 points or 2 percent at 815.94. Despite the losses on the day, the major averages still closed higher for the third straight week due largely to the rally seen on Monday. The Dow rose 6.8 percent for the week, while the Nasdaq and the S&P 500 posted weekly gains of 6 percent and 6.2 percent, respectively.
In economic news, the National Bureau of Statistics on Friday said Chinese industrial firms' profit declined 37.3 percent on a yearly basis in the first two months of the year to 219.1 billion yuan. During the same period of previous year, profits were up 16.5 percent. State owned enterprises earned a profit of 56.7 billion yuan, down 59.2 percent, while profits earned by companies with foreign investment stood at 62 billion yuan, which was 39.3 percent smaller than the previous year level.
In corporate news, China Petroleum and Chemical Corporation (Sinopec) saw an annual decline of 47.3 percent in its net profit in 2008, the company said on Sunday. Net profit totaled 29.769 billion yuan in 2008 with earnings per share fell by 0.309 yuan to 0.343 yuan, due to fuel price caps, windfall taxes and decreased demand in the fourth quarter last year, the company said in a statement. Total turnover reached 1.42 trillion yuan, for an annual increase of 21 percent. Earnings before interest and tax fell 67.2 percent to 28.1 billion yuan last year.
Also, China Construction Bank saw a net profit of 92.6 billion yuan in 2008, the company said on Friday, up 34.1 percent year on year, with earnings per share up 33.3 percent at 0.4 yuan. Net interest margin in 2008 was 3.24 percent, compared with 3.18 percent in 2007, while net interest spread was at 3.10 percent, compared with 3.07 percent in 2007.
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