Higher Open Predicted For China Stock Market

The China stock market rebounded on Friday, one session after snapping the three-day winning streak in which it had advanced almost 60 points or 2 percent. The Shanghai Composite Index now rests just beneath the 3,085-point plateau and it’s expected to open in the green again on Monday.

The global forecast for the Asian markets is upbeat, with bargain hunting expected – especially among the oil and technology stocks. The European and U.S. bourses were sharply higher and the Asian markets are tipped to open in similar fashion.

The SCI finished modestly higher on Friday following gains from the financials, properties and resource stocks.

For the day, the index advanced 29.29 points or 0.96 percent to finish at 3,084.28 after trading between 3,059.25 and 3,086.10. The Shenzhen Composite Index added 9.80 points or 0.51 percent to end at 1,931.45.

Among the actives, Industrial and Commercial Bank of China climbed 1.08 percent, while Bank of China rose 0.31 percent, China Construction Bank collected 0.67 percent, China Merchants Bank strengthened 1.48 percent, Bank of Communications gathered 1.44 percent, China Life Insurance was up 0.12 percent, Jiangxi Copper added 0.35 percent, Aluminum Corp of China (Chalco) advanced 0.88 percent, Yankuang Energy surged 5.14 percent, PetroChina increased 0.58 percent, China Petroleum and Chemical (Sinopec) gained 0.94 percent, Huaneng Power lost 0.42 percent, China Shenhua Energy skyrocketed 7.54 percent, Gemdale spiked 3.85 percent, Poly Developments soared 6.35 percent, China Vanke rallied 3.84 percent and China Fortune Land Development accelerated 6.55 percent.

The lead from Wall Street is broadly positive as the major averages opened Friday solidly higher and picked up steam as the day progressed, ending solidly in the green.

The Dow jumped 466.36 points or 1.47 percent to finish at 32,196.66, while the NASDAQ spiked 434.00 points or 3.82 percent to end at 11,805.00 and the S&P 500 advanced 93.81 points or 2.39 percent to close at 4,023.89. For the week, the NASDAQ plunged 2.8 percent, the S&P sank 2.4 percent and the Dow dropped 2.1 percent.

The rally on Wall Street came as traders went bargain hunting following the sharp decline shown by the markets over the past month.

While recent bargain hunting efforts have largely been thwarted by worries about the Federal Reserve aggressively raising interest rates in an effort to combat elevated inflation, traders seemed to shrug off those concerns.

In economic news, the University of Michigan said consumer sentiment deteriorated more than expected in May. Also, the Labor Department said import prices were unchanged in of April.

Crude oil prices rose sharply Friday, lifting the most active crude futures contracts on fears of supply shortage. West Texas International Crude oil futures for June ended higher by $4.36 or 4.1 percent at $110.49 a barrel.

Closer to home, China is scheduled to release a batch of data his morning, including April figures for fixed asset investment, industrial production, retail sales and unemployment.

FAI is expected to rise 7.0 percent on year, slowing rom 9.3 percent in March. Industrial production is expected to add an annual 0.4 percent, down from 5.0 percent in the previous month. Retail sales are expected to sink 6.1 percent on year after losing 3.5 percent a month earlier. The jobless rate in March was 5.8 percent.