RTTNews - The China stock market added just a handful of points on Tuesday, but that was enough to extend its winning streak to three sessions - collecting more than 130 points or 4.8 percent en route to a 10-month closing high. The Shanghai Composite Index is holding support at the 2,700-point plateau, and now investors are expecting the market to hover in a tight range around that level throughout Wednesday's trade.
The global forecast provides little guidance for the Asian markets, thanks to fairly directionless trade on mixed economic data and corporate news. Several of the markets have posted major gains in the past week, so a bit of profit taking could be in order. The U.S. markets ended barely higher, while the European bourses finished mixed but close to the unchanged line - and the Asian markets are forecast to follow that latter lead with perhaps a touch of downside bias.
The SCI finished barely higher on Tuesday, as gains among the resource stocks were largely offset by weakness in the financial sector.
For the day, the index was up 3.02 points or 0.11 percent to close at 2,724.30 after trading between 2,713.47 and 2,750.88. The Shenzhen Index was up 62.99 points or 0.6 percent to finish at 10,484.33 for a combined turnover of 240 billion yuan.
Among the actives, Zijin Mining Group was up 5.2 percent, while Western Mining rose 1.4 percent, Shenzhen Zhongjin Lingnan Nonfemet added 5.5 percent, China Life Insurance was down 1.1 percent, Bank of China fell 1.1 percent, China Vanke gained 0.6 percent, Poly Real Estate jumped 2.9 percent and China Construction Bank eased 0.6 percent.
The lead from Wall Street is mildly positive as stocks were able to end Tuesday's trading mostly higher after seeing choppy trading for most of the session. The major averages all finished the day in positive territory, extending their winning streak for a fourth straight session.
Earlier in the session, traders reacted positively to the release of a report from the National Association of Realtors showing that pending home sales increased by much more than expected in the month of April. The report showed that the pending home sales index rose 6.7 percent to 90.3 in April from a reading of 84.6 in March. Economists had been expecting a much more modest increase by the index of about 0.5 percent.
In corporate news, General Motors revealed that it has entered into a memorandum of understanding with a buyer for its premium off-road brand Hummer. The deal would save around 3,000 jobs in the U.S. Separately, GM said it delivered a total of 191,875 vehicles in May, down 29.6 percent from 272,363 vehicles last year. GM total truck sales were down 22 percent last year, while car sales were down 38 percent compared to a year-ago. The company delivered a total of 1,739 hybrid vehicles in May.
Ford (F) said that its May U.S. sales fell 24.2 percent from a year ago, as vehicle demand continued to shrink in a challenging economic and competitive environment. However, the automaker's May sales were up 20 percent from the previous month, marking the highest sales for any month since July 2008.
Meanwhile, financial services provider JP Morgan Chase (JPM) said it plans to raise around $5 billion in common equity as part of its effort to repay $25 billion of the capital it received from the federal bailout fund. American Express (AXP) has commenced a public offering of $500 million of its common stock. Part of the funding is expected to go to a repurchase of $3.4 billion of preferred shares issued to the U.S. Treasury as part of the Capital Purchase Program.
The major averages ended the day modestly higher, although well off their best levels of the day. The Dow finished up by 19.43 points or 0.2 percent at 8,740.87, the NASDAQ closed up 8.12 points or 0.4 percent, at 1,836.80 and the S&P 500 finished up by 1.87 points or 0.2 percent at 944.74.
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