The China stock market finished lower by less than 2 points, but that was enough to end the five-day winning streak that saw it add almost 100 points or 4 percent en route to a fresh eight-month high. The Shanghai Composite Index remained above support at 2,530 points, and now analysts suggest that the market could resume its upward march on Friday.
The global forecast for the Asian markets is positive, thanks to better than expected earnings news on the corporate front - which may provide the technology and financial sectors with a lift. The United States also reported some economic news that beat expectations, sending Wall Street significantly higher. The European bourses also ended with sharp gains, and the Asian markets are expected to track higher as well.
The SCI finished barely lower on Thursday, as investors largely shook off weak GDP data. Technology stocks ended lower, as did the airlines and commodities.
For the day, the index eased 1.93 points or 0.1 percent to close at 2,534.13 after trading between 2,497.12 and 2,549.31. The Shenzhen Composite Index fell 0.1 percent to 859.51.
Among the gainers, China Shenhua Energy lost 3.1 percent, while China National Software & Service Co tumbled 5.2 percent, China Southern Airlines shed 3.1 percent, Air China lost 1.9 percent, China Merchants Bank was up 0.9 percent and China United Telecommunications dropped 1.2 percent.
The lead from Wall Street is broadly optimistic as stocks moved sharply higher over the course of the trading session on Thursday, with the major averages all closing firmly in positive territory after seeing some earlier uncertainty. As was the case in the previous session, a late day rally contributed to the higher close.
In corporate news, financial services giant JP Morgan (JPM) released its first quarter financial results before the start of trading, reporting earnings that fell year-over-year but came in above analyst estimates. JP Morgan reported first-quarter net income of $0.40 per share compared to $0.67 per share in the year ago quarter. Analysts had expected the company to report earnings of $0.32 per share. Revenues also came in better than expected.
Additionally, mobile phone giant Nokia (NOK) generated some buying interest after the company reported first quarter earnings that fell sharply year-over-year but said it expects second quarter worldwide mobile device volume to be flat or show modest sequential growth.
On the economic front, a Commerce Department report showed that housing starts fell 10.8 percent to an annual rate of 510,000 in March from the revised February estimate of 572,000. Economists had expected starts to slip to 540,000 from the 583,000 originally reported for the previous month.
Meanwhile, the Labor Department said initial jobless claims fell to 610,000 from the previous week's revised figure of 663,000. Economists had expected jobless claims to edge up 658,000 from the 654,000 originally reported for the previous week. However, continuing claims rose to a new record high.
Separately, the Philadelphia Federal Reserve said its index of regional manufacturing activity rose to a negative 24.4 in April from a negative 35.0 in March. While a negative reading indicates a contraction in the sector, the index increased by much more than expected.
The major averages moved off their best levels of the day going into the close but still ended the day sharply higher. The Dow closed up 95.81 points or 1.2 percent at 8,125.43, the NASDAQ closed up 43.64 points or 2.7 percent at 1,670.44 and the S&P 500 closed up 13.24 points or 1.6 percent at 865.30. With the gains, the Dow and the S&P 500 ended the session at their best closing levels in over two months, while the tech-heavy NASDAQ finished the day at its best closing level since early November of 2008.
In economic news, China's gross domestic product expanded 6.1 percent in the first quarter of 2009, the National Bureau of Statistics said on Thursday - slightly higher than expectations for a 6.0 increase following the 6.8 percent gain in the previous quarter. It also marks the slowest rate of increase since the quarterly data was first collected in 1992. It also casts some doubt over the government's full-year GDP target of 8 percent growth following the 9 percent expansion in 2008 and the 13 percent gain in 2007.
The NBS also said that consumer prices in China eased 1.2 percent on year in March. Forecasts had called for a 1.4 percent decline after the 1.6 percent annual fall in February. On month, inflation was down 0.3 percent - mostly due to weak domestic demand and falling commodity prices. For the first quarter of 2009, inflation was down 0.6 percent on year following a 5.9 percent increase for all of 2008. Also, producer prices fell an annual 4.6 percent in the first quarter.
Industrial production in China was up 5.1 percent on year through the first three months of 2009, following a 12.9 percent jump in all of 2008. In March, industrial production added 8.3 percent, the data showed. Analysts had expected a 6.3 percent annual increase following the 11 percent jump in February.
Also, the NBS said that urban fixed asset investment was up 28.6 percent on year in the first quarter and 30.3 percent in March. Retail sales were up 15 percent in the first quarter and 14.7 percent in March.
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