China Stock Market May Add To Its Winnings On Friday

The China stock market has moved higher in two of three trading days since the end of the three-day slide in which it had fallen more than 30 points or 1 percent. The Shanghai Composite Index now sits just beneath the 3,035-point plateau and it’s tipped to open in the green again on Friday.

The global forecast for the Asian markets is cautiously optimistic thanks to easing Treasury yields. The European markets were down and the U.S. bourses were mostly higher and the Asian markets are tipped to follow the latter lead.

The SCI finished modestly higher on Thursday following mixed performances from the financial shares, property stocks and resource companies.

For the day, the index rose 6.91 points or 0.23 percent to finish at 3,034.25 after trading between 3,009.90 and 3,050.34.

Among the actives, Industrial and Commercial Bank of China lost 0.37 percent, while Bank of China fell 0.44 percent, China Construction Bank sank 0.71 percent, China Merchants Bank shed 0.58 percent, China Life Insurance collected 0.25 percent, Jiangxi Copper plunged 3.14 percent, Aluminum Corp of China (Chalco) rallied 1.38 percent, Yankuang Energy gained 0.56 percent, PetroChina lost 0.39 percent, China Petroleum and Chemical (Sinopec) rose 0.31 percent, Huaneng Power jumped 1.74 percent, China Shenhua Energy fell 0.32 percent, Gemdale skidded 1.16 percent, Poly Developments added 0.49 percent, China Vanke tumbled 1.85 percent and Bank of Communications was unchanged.

The lead from Wall Street is fairly positive as the major averages shook off early weakness and climbed well into the green, although the Dow failed late and ended in the red.

The Dow eased 2.43 points or 0.01 percent to finish at 38,459.08, while the NASDAQ surged 271.84 points or 1.68 percent to end at 16,442.20 and the S&P 500 added 38.42 points or 0.74 percent to close at 5,199.06.

The rally by the NASDAQ and S&P 500 seemed to coincide with the release of the results of the Treasury Department’s auction of $22 billion worth of 30-year bonds, which saw average demand.

Treasury yields pulled back off their highs following the release of the results, with the yield on the benchmark 10-year note giving ground. The Treasury revealed below average demand for this month’s three-year and 10-year note auctions earlier in the week.

In economic news, the Labor Department released a report showing producer prices increased in line with estimates in March.

Crude oil prices dropped from five-month highs on Thursday amid concerns the Federal Reserve will keep interest rates higher for a longer period due to inflationary pressures. West Texas Intermediate crude oil futures for May ended down by $1.19 at $85.02 a barrel.

Closer to home, China will release March data for imports, exports and trade balance later this morning. In February, imports were up 3.5 percent on year and exports rose an annual 7.1 percent for a trade surplus of $125.16 billion.

Market Analysis