The winning streak has hit three sessions for the China stock market, which has gained nearly 70 points or 3 percent along the way en route to a seven-month closing high. The Shanghai Composite Index broke through resistance at 2,425 points, and now analysts say that more upside remains for the market at the opening of Friday's trade -although the market may ease later in the day ahead of Monday's market holiday for the Ching Ming Festival.
The global forecast for the Asian markets continues to be strong, although some profit taking may set in as several bourses already have seen major gains this week. The G-20 economic summit in London has generated considerable positive momentum, fueling optimism that the global economy may finally be starting to recover. The European markets finished sharply higher, as did the U.S. markets - and the Asian bourses are predicted to follow suit.
The SCI finished modestly higher on Thursday, lifted by strength among the financials, commodities and steel stocks.
For the day, the index added 17.27 points or 0.72 percent to close at 2425.29 after trading between 2,417.11 and 2,450.00 on turnover of 174.9 billion yuan. The Shenzhen Index rose 0.8 percent to finish at 805.12.
Among the gainers, Bank of Communications rose 2.0 percent, while China Minsheng Bank climbed 2.7 percent, Ping An Insurance added 3.2 percent, China Life advanced 2.8 percent, China Construction Bank rose 1.6 percent, Aluminum Corp. of China (Chinalco) rose 2.9 percent and Baoshan Iron & Steel added 1.5 percent.
The lead from Wall Street remains upbeat as stocks showed a strong upward move during trading on Thursday, as investors reacted well to mixed economic news and liked what they heard from the G-20 summit in London. The continued advance also reflected some optimism about stabilization in the economy.
Before the start of trading, the Labor Department said that initial jobless claims in the week ended March 28th unexpectedly rose to 669,000 from the previous week's revised figure of 657,000. With the increase, jobless claims rose to a new twenty-six year high.
Additionally, a report from the Commerce Department showing that factory orders rose 1.8 percent in February added to recent signs of stabilization in the economy, although the report also showed a notable downward revision to the data for January.
Meanwhile, traders were also keeping a close on the Group of 20 Summit in London, with the world leaders assembled at the meeting pledging to do whatever is necessary to end the economic crisis. President Barack Obama called the agreements reached by leaders a turning point in our pursuit of global economic recovery.
However, the president cautioned that while the reforms agreed to are necessary, they might not be sufficient. In order to ensure that a stable recovery takes hold, the G-20 will meet again in the fall, Obama announced. While noting that it is important that nations agree on an action plan, the president said individual actions remain just as important.
While the major averages gave back some ground going into the close, they still ended the session firmly positive. The Dow closed up 216.48 points or 2.8 percent at 7,978.08, the NASDAQ closed up 51.03 points or 3.3 percent at 1,602.63 and the S&P 500 closed up 23.30 points or 2.9 percent at 834.38. With the gains, the Dow and the S&P 500 ended the session at their best closing levels in nearly two months, while the tech-heavy Nasdaq set a nearly three-month closing high.
In corporate news, Tongjitang Chinese Medicines Co. on Thursday acquired 100 percent of privately owned Anhui Jingfang Pharmaceutical Co. Ltd. for RMB 60.0 million in cash. Tongjitang has paid 90 percent of the consideration and will pay the remaining 10 percent near the end of April. Tongjitang Chinese Medicines Co. is a vertically integrated and profitable specialty pharmaceutical company focused on the development, manufacturing, marketing and selling of modernized traditional Chinese medicine in China.
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