The China stock market ended higher for a third consecutive session, collecting nearly 75 points or 3 percent in the process en route to an eight-month high. The Shanghai Composite Index cracked resistance at 2,500 points, and now analysts say that the market could hover in that vicinity again in Tuesday's trade.
The global forecast for the Asian markets is mixed, since several bourses around the world have been closed in the wake of the Easter holiday and have to play some catch-up. Uninspired corporate earnings news continues to weigh on investors, although there remains some optimism over the impending recovery of the global economy. The European markets were mostly closed, while the U.S. markets were mixed flat - and the Asian bourses are projected to also remain close to the unchanged line.
The SCI finished sharply higher on Monday, thanks to solid gains among the commodities and the steelmakers. For the day, the index surged 69.47 points or 2.8 percent to close at 2513.70 after trading between 2,464.06 and 2,522.45. The Shenzhen Composite Index rose 1.8 percent to end at 835.91.
Among the gainers, Wuhan Iron and Steel, China Oilfield Services, Datong Coal Industry, Pingdingshan Tianan Coal Mining, China Cosco Holdings, China Shenhua Energy all rose by the 10 percent daily limit, while Jiangxi Copper rose 4.3 percent, China Construction Bank rose 1.1 percent, China Merchants Bank was up 1.4 percent, PetroChina was up 4 percent, China Petroleum & Chemical Corp. gained 5.3 percent and Baoshan Iron & Steel rose 4 percent.
Wall Street offers a fairly flat lead as stocks staged a notable recovery attempt over the course of the afternoon after seeing considerable weakness in morning trading on Monday. The major averages moved well off their worst levels of the day, eventually ending the session mixed. The early weakness came as traders cashed in on recent gains amid some uncertainty about the impending earnings season, with financial giants Citigroup (C), JP Morgan (JPM), and Goldman Sachs (GS) among the companies that are due to release their quarterly results this week.
Boeing (BA) contributed to the anxiety about the outlook for earnings, with the aerospace giant saying that its first quarter earnings would be negatively impacted by decisions to reduce airplane production as well as unfavorable price escalation.
Some selling pressure was also generated by a report from the New York Times that said the Treasury Department is directing General Motors (GM) to prepare for a bankruptcy filing by June 1. The report specified that one plan under consideration would create a new company that would buy the good assets of the company almost immediately after the carmaker files for bankruptcy.
Nonetheless, the late day recovery was due in part to news that the Obama administration plans to ease certain restrictions on transactions with Cuba, including allowing U.S. telecom companies to apply for licenses in the island nation. Some buying interest was also generated by an announcement that President Barack Obama will deliver a major speech on the economy at Georgetown University on Tuesday.
The White House said that the president would discuss how each step his administration has taken to confront this economic crisis fits within his broader vision of how we move this economy from recession to recovery and ultimately to prosperity.
Earlier in the day, President Obama marked the 2,000th transportation project to be approved under the $787 billion economic relief package. The government effort is coming in ahead of schedule and under budget, Obama announced, praising the efforts of Transportation Secretary Ray LaHood and Vice President Joe Biden.
While the major averages all moved into positive territory in late day trading, the Dow slipped back into the red going into the close. The Dow closed down 25.57 points or 0.3 percent at 8,057.81, while the NASDAQ closed up 0.77 points or 0.1 percent at 1,653.31 and the S&P 500 closed up 2.17 points or 0.3 percent at 858.73.
In economic news, the National Bureau of Statistics said on Monday that property prices in Chinese cities dropped 1.3 percent in March from the prior year, following a 1.2 percent fall in February. The decline in March was the biggest since records began in 2005. The property outlook index stood at 94.74 in March, down 9.98 points from the previous year. During January to March, investment in real estate rose 4.1 percent to 488 billion yuan. On the other hand, new construction by floor area declined 16.2 percent.
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