RTTNews - The losing streak has reached three sessions now for the China stock market, which has retreated more than 210 points or 6 percent in that time. The Shanghai Composite Index is clinging to support at 3,260 points, but now investors are looking for a solid rebound from the market when it opens for business on Monday.
The global forecast for the Asian markets is optimistic, fueled by better than expected economic data out of the United States. Properties and retail stocks are tipped to move higher, although some of the gains may be capped by profit taking among the commodities following last week's run-up. The European and U.S. markets finished firmly in positive territory, and the Asian bourses are also projected to move higher.
The SCI finished sharply lower again on Friday, thanks to lingering concerns over a potential tightening in China's monetary policy. Steel stocks and energy producers were a key drag on the index.
For the day, the index plummeted 95.64 points or 2.9 percent to close at 3,260.69 after trading between 3,244.10 and 3,374.46. The Shenzhen Composite Index shed 38.32 points or 3.4 percent to finish at 1087.23.
Leading the decliners, Baoshan Iron & Steel fell 3.5 percent, while Wuhan Iron & Steel lost 5.6 percent, Sunvim Group shed 7.0 percent and Baoding Tianwei Baobian Electric fell 6.8 percent.
Wall Street offers a broadly positive lead as stocks saw a notable rally on Friday, fueled by the day's encouraging economic data. The major averages all finished in positive territory by notable margins, offsetting some of the losses posted earlier in the week.
Buying interest in stocks was sparked by a Labor Department report showing that the pace of job losses slowed by even more than economists had been anticipating in the month of July. The report showed that non-farm payroll employment fell by 247,000 jobs in July following a revised decrease of 443,000 jobs in June. Economists had been expecting employment to fall by 325,000 jobs compared to the drop of 467,000 jobs originally reported for the previous month.
Additionally, the Labor Department said that the unemployment rate unexpectedly edged down to 9.4 percent in July from 9.5 percent in June. With the decrease, the unemployment rate fell for the first time since April of 2008.
On the earnings front, American International Group (AIG) and Fannie Mae (FNM) saw mixed reaction to their quarterly results as the firms are lingering in the shadow of receiving government bailout funds last fall.
Meanwhile, Hansen Natural Corp. (HANS), Nvidia (NVDA) and AES Corp. (AES) largely beat estimates. Generally, companies have been able to surpass expectations on the bottom line via cost cutting, as revenue growth was limited by the recent economic conditions.
The major averages ceded some ground in late session trading but still finished with strong gains. The Dow closed up by 113.81 points or 1.2 percent at 9,370.07, the NASDAQ climbed by 27.09 points or 1.4 percent to 2,000.25, and the S&P 500 rose by 13.40 points or 1.3 percent to 1,010.48. With the gains, the major averages all closed higher for the week, marking the fourth consecutive week of gains. The Dow and the S&P 500 posted weekly gains of 2.2 percent and 2.3 percent, respectively, while the NASDAQ rose by a more modest 1.1 percent for the week.
In economic news, China will on Monday provide July data for its consumer price index and producer price index. CPI is expected to ease 1.6 percent on year after the 1.7 percent contraction a month earlier. PPI is called lower by an annual 8.3 percent following the 7.8 percent decline in June.
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