RTTNews - One day after ending the modest two-day winning streak in which it had gathered more than 85 points or 3.2 percent, the China stock market turned right back to the upside on Friday. The Shanghai Composite Index is close to reclaiming the 2,650-point plateau, but analysts are calling it unlikely that the market will do so on Monday.
The global forecast for the Asian markets is modestly negative uncertain economic data and corporate news at the end of last week - and investors also figure to be nervous ahead of more corporate results and data this week. The European markets finished last week in mixed fashion with a slight downside bias, while the U.S. markets ended with modest declines - and the Asian markets are predicted to fall right in between the two leads.
The SCI finished slightly higher on Friday, nudged into positive territory by gains among the pharmaceuticals. Weakness among the property stocks offset most of the other gains.
For the day, the index picked up 5.38 points or 0.20 percent to close at 2,645.26 after trading between 2,623.36 and 2,661.37 on turnover of 106.61 billion yuan. There were 482 gainers and 331 decliners, with 15 stocks finishing unchanged. The Shenzhen Index was up 0.56 percent to finish at 885.73 points.
Among the gainers, Shenzhen Neptunus Bioengineering and Holley Pharmaceuticals both rose by the daily 10 percent limit, while Cofco Property was down 2 percent, PetroChina added 0.46 percent, China Shenhua Energy Co rose 0.48 percent, Shanghai Pudong Development Bank was up 1.29 percent, Bank of Communications added 1.7 percent and China Construction Bank gained 0.44 percent.
Bucking the trend, Gemdale Corporation retreated 0.72 percent and China Merchants Property Development fell 1.18 percent.
The lead from Wall Street is downbeat as stocks ended Friday's trading mostly lower after showing a lack of direction throughout much of the session. The major averages all finished the day firmly in negative territory after ending the previous session notably higher. Volatility came as traders digested a slew of economic data that added to investor uncertainty about the outlook for the markets. Below average volume also contributed to the choppy trading.
Before the start of trading, the Labor Department said its consumer price index was unchanged in April after edging down by 0.1 percent in March. The lack of growth in consumer prices came in line with the expectations of economists. While energy prices showed another significant decrease, the 2.4 percent drop in energy prices was offset by a 9.3 percent jump in tobacco prices. Food prices slipped 0.2 percent in April after edging down 0.1 percent in March.
The report also showed that the core consumer price index, which excludes food and energy prices, rose 0.3 percent in April after rising 0.2 percent in each of the three previous months. Economists had expected core prices to edge up 0.1 percent. Additionally, a report from the Federal Reserve showed a slightly smaller than expected 0.5 percent decrease in industrial production in April, while the Reuters/University of Michigan Consumer Sentiment index rose to 67.9 in May from 65.1 in the previous month.
On the earnings front, retailer JC Penney (JCP) reported first quarter earnings that edged out analyst estimates, while Abercrombie & Fitch (ANF) reported a first quarter loss. In other news, ailing automaker General Motors (GM) said Friday that it has started to notify about 1,100 underperforming and very low sales volume U.S. dealers that they will not be retained on a long-term basis. The move is part of GM's updated viability plan submitted last month under which the automaker plans to reduce its current dealer network of 5,969 stores to about 3,600 by the end of 2010.
The major averages all closed notably lower, although off their worst levels of the day. The Dow closed down 62.68 points or 0.8 percent at 8,268.64, the NASDAQ closed down 9.07 points or 0.5 percent at 1,680.14 and the S&P 500 closed down 10.19 points or 1.1 percent at 882.88. With today's losses, the major averages all closed lower for the week, with the NASDAQ snapping a nine-week winning streak. The NASDAQ fell 3.4 percent for the week, while the Dow and the S&P 500 posted weekly losses of 3.6 percent and 5 percent, respectively.
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