The China stock market on Friday saw an end to the three-day winning streak in which it added nearly 70 points or 3 percent en route to a seven-month closing high. The Shanghai Composite Index is maintaining support above 2,400 points - and it has some positive sentiment to make up following Monday's market holiday for the Ching Ming Festival, as well as some pessimism from the overnight sessions.
The global forecast for the Asian markets is negative as investors are expected to lock in profits from recent winning streaks ahead of the opening of corporate earning season - which kicks off this week. Some other disappointing news out of the corporate world added to the negative sentiment, which prompted the European and U.S. markets to finish firmly in the red - and the Asian bourses are tipped to follow that lead.
The SCI finished slightly lower on Friday, reduced by profit taking from the recent winning streak. Financials ended significantly higher, as did the coal miners.
For the day, the index eased 5.51 points or 0.23 percent to close at 2,419.78 after trading between 2,406.50 and 2,456.81. The Shenzhen Index was down 56.26 points or 0.6 percent to finish at 9,244.66 for a combined turnover of 241.45 billion yuan. Decliners outnumbered gainers by 646 to 218 in Shanghai and by 454 to 287 in Shenzhen.
Among the gainers, Anhui Hengyuan Coal Industry and Electricity Power both rose by the daily limit of 10 percent, while China Minsheng Banking Corp. soared 7.41 percent, Huaxia Bank added 4.46 percent and SDIC Xinji Energy Company was up 3.64 percent.
Finishing lower, Zhongjin Gold shed 5.46 percent, while Yunnan Copper was down 6.26 percent, Tongling Nonferrous Metals Group Holdings lost 4.77 percent and Shandong Gold Mining fell 5.7 percent.
The lead from Wall Street is pessimistic as stocks regained some ground over the course of afternoon trading on Monday, but they remained mostly negative after trending lower throughout much of the morning. The major averages all ended the day lower after closing higher in the four previous sessions. The notable decline seen in morning trading came as traders cashed in some of the recent gains amid some disappointing corporate news and negative analyst comments.
Sun Microsystems (JAVA) helped to lead the technology sector lower after media reports said that acquisition talks between IBM (IBM) and Sun have collapsed, putting the deal at risk of failure. The reports said that Sun's board rejected a formal acquisition offer by IBM on Saturday, sending a notice terminating Sun's deal to hold talks exclusively with IBM. In response, IBM reportedly withdrew its offer to acquire Sun on Sunday.
Additionally, bank stocks saw notable weakness in reaction to negative comments from veteran banking analyst Mike Mayo, who recently left Deutsche Bank AG to join Calyon Securities. Mayo initiated coverage of several banks with either Sell or Underperform ratings, citing concerns about increased loan losses and the belief that government actions might not help as much as expected.
In other news, the U.S. Treasury Department has extended the deadline for applications to its public-private initiative to buy up distressed assets from banks. The deadline has been pushed out two weeks until April 24. The treasury's program allows fund managers to participate with the government in an initiative aimed at taking distressed assets off the balance sheets of banks. These assets have become nearly impossible to sell since the financial turmoil that set in last year, forcing banks to announce huge write-offs and putting the overall financial system in jeopardy.
Meanwhile, President Barack Obama told Turkish lawmakers Monday that he stood behind their bid to join the European Union. The president also stressed that the U.S. remains a friend to the Muslim world, even as the country fights Islamic terrorism.
The major averages showed a notable upward move going into the close but still ended the day in the red. The Dow closed down 41.74 points or 0.5 percent at 7,975.85, the NASDAQ closed down 15.16 points or 0.9 percent at 1,606.71 and the S&P 500 closed down 7.02 points or 0.8 percent at 835.48.
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