RTTNews - The China stock market has finished higher in two of three trading days since ending the two-day losing streak in which it lost 70 points or 2.4 percent. The Shanghai Composite Index regained support at 2,800 points after giving it up earlier this week, although investors are looking for the market to trend back below that plateau again in Thursday's trade.
The global forecast for the Asian markets is flat with a touch of downside. Financials are expected to be in focus following the Obama administration's proposed financial system reforms. Technology shares may provide a bit of support, as might the commodities after some heavy selling in recent sessions. The European markets finished sharply lower and the American bourses ended virtually flat, and the Asian markets are projected to fall right in between with modest declines.
The SCI finished sharply higher on Wednesday, shrugging off weakness from the morning session thanks to gains among the properties and medical stocks. Financials also were generally higher, as were the gold miners.
For the day, the index added 34.1 points or 1.23 percent to close at 2,810.12 after trading between 2,744.22 and 2,813.61. The Shenzhen Index was up 243.29 points or 2.25 percent to close at 11,040.49 points for a combined turnover of 186.046 billion yuan. Gainers outnumbered losers by 689 to 164 in Shanghai and 602 to145 in Shenzhen.
Among the gainers, Guilin Layn Natural Ingredients Corp. rose by the daily limit of 10 percent, while Poly Real Estate was up 8.23 percent, China Vanke gained 9.7 percent, Shanghai Jiao Da Onlly Co. Ltd. gained 9.98 percent, Industrial & Commercial Bank of China rose 1.4 percent, Shanghai Pudong Development Bank was up 0.5 percent, Zhongjin Gold rose 6.9 percent and Shandong Gold-mining was up 2.5 percent.
Wall Street offers little in the way of guidance with perhaps a slight negative bias as the major averages finishing on opposite sides of the unchanged line on Wednesday following two days of steep losses. The lack of conviction came amid low volume and mixed trader sentiment regarding near-term economic prospects and proposed financial system reforms from the Obama administration.
Seeking to prevent a recurrence of the financial meltdown that sunk the U.S. economy into a recession, President Barack Obama laid out a sweeping agenda for regulatory reform earlier this afternoon. The president proposed granting the Federal Reserve the authority to scrutinize firms that are large enough to pose a systemic risk to the financial markets.
In addition, Obama called for the creation of an oversight council of existing federal regulators to share information, identify gaps in regulation and tackle issues that don't fit neatly into an organizational chart. Obama also called for the creation of a new agency dedicated to looking out for the interests of consumers in the financial markets.
Earlier, traders digested a report on consumer prices from the Labor Department that showed a modest increase in the month of May, with the mild price growth coming in below the expectations of economists. The report showed that prices edged up 0.1 percent in May after coming in unchanged in April. Economists had been expecting a somewhat more substantial increase in prices of about 0.3 percent.
Core consumer prices, which exclude food and energy prices, also edged up 0.1 percent in May following a 0.3 percent increase in April. The modest increase in core prices came in line with economist estimates.
In other news, the Federal Reserve continued its treasury buyback program Wednesday, completing its second quantitative easing move of the week. The New York Federal Reserve purchased $7.0 billion worth of securities with maturity dates ranging from May of 2016 to May of 2019. The day's buyback saw a total of $26.2 billion in treasuries submitted for the purchase. Overall, the Fed has purchased a total of $169.97 billion since the program began on March 25th.
The major averages ended the session mixed, largely unable to hold onto their earlier gains. While the NASDAQ finished higher by 11.88 points or 0.7 percent at 1,808.06, the Dow slid 7.49 points or 0.1 percent to 8,497.18 and the S&P 500 dropped by 1.26 points or 0.1 percent to 910.71.
In corporate news, China Southern Airlines has selected Pratt & Whitney's PW4170 Advantage70 engine to power 10 Airbus A330 aircraft. The contract is valued at $590 million, including a 10-year Fleet Management Plan for engine maintenance.
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