Market Commentary and Intraday News

China Stocks May Add To Gains

291 days ago

(RTTNews) - The China stock market has moved higher now in consecutive trading days, collecting almost 45 points or 2.1 percent in the process. The Shanghai Composite Index ended just below the 2,155-point plateau, and now analysts are predicting continued support at the opening of trade on Tuesday.

The global forecast for the Asian markets remains upbeat following good news regarding the European debt concerns. Greece's international creditors said the embattled euro area member is committed to the planned budget cuts. Profit taking may limit the upside, along with remarks by Italian Prime Minister Mario Monti - who warned that Europe is facing the threat of a psychological disintegration. The European and U.S. markets finished higher, and the Asian bourses are expected to open in similar fashion.

The STI finished sharply higher on Monday following support from the brokerage stocks.

For the day, the index spiked 22.12 points or 1.04 percent to finish at 2,154.92 after trading between 2,127.26 and 2,158.68. The Shenzhen Composite Index surged 19.49 points or 2.2 percent to end at 891.30.

Among the gainers, Suzhou New District Hi-Tech Industrial jumped by the 10 percent daily limit, while Shanghai Zhangjiang Hi-Tech Park Development surged 9.7 percent, Nanjing Xingang High-Tech collected 5.5 percent, Sinolink Securities soared 3.3 percent, Changjiang Securities climbed 2.8 percent and Citic Securities jumped 1.6 percent.

The lead from Wall Street is positive as stocks gave back ground in the latter part of Monday's trade but still ended mostly higher after seeing early strength. The markets extended the strong upward move that began Friday. Despite the late-day pullback, the major averages all ended the session at their highest closing levels in three months.

The early upward move came as traders continued to react positively to last Friday's monthly jobs report, which showed that the U.S. economy added 163,000 jobs in July compared to expectations for an increase of 100,000 jobs. However, the unemployment rate unexpectedly edged up to 8.3 percent in July from 8.2 percent in June.

Optimism about the financial situation in Europe also contributed to the early strength, with traders expecting the European Central Bank to take additional steps to address the ongoing debt crisis. Buying interest was also generated by news that Greece and its international creditors have agreed on the need to strengthen policy efforts and meet the country's bailout conditions. The lenders are set to resume discussions with Greek authorities next month.

But remarks by Italian Prime Minister Mario Monti helped to limit the upside for the markets, as he warned that Europe is facing psychological disintegration and urged all leaders to become more independent from their parliaments. In an interview with German magazine Der Spiegel, Monti said the debt crisis risks the future of the single-currency bloc.

Among individual stocks, shares of Best Buy moved sharply higher on news that the consumer electronic retailer's founder and chairman Richard Schulze offered to acquire the company for $24 to $26 per share in cash. On the other hand, Knight Capital Group came under pressure after the financial services company said it has entered into an agreement for the sale of stock in an effort to survive the huge trading loss it incurred on erroneous trades.

The major averages showed a notable move to the downside going into the close but ended the day in positive territory. The Dow edged up 21.34 points or 0.2 percent to finish at 13,117.51, while the NASDAQ rose 22.01 points or 0.7 percent to end at 2,989.91 and the S&P 500 crept up 3.24 points or 0.2 percent to 1,394.23.

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