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Win Streak Likely To End For China Stock Market

2/26/2012 7:52 PM ET

The win streak for the China stock market has stretched to six sessions, gathering more than 80 points or 3.4 percent en route to a fresh 14-week closing high. The Shanghai Composite Index finished just shy of the 2,440-point plateau, and now analysts are predicting consolidation at the opening of trade on Monday.

The global forecast for the Asian markets is mixed with a hint of downside as investors figure to remain cautious regarding lingering concerns over the debt situation in Europe, as well as geopolitical tensions concerning Syria and Iran. Steel and oil companies are expected to provide support, with gold and airlines called lower. The European and U.S. markets were mixed but little changed on Friday, and the Asian bourses are expected to follow suit.

The SCI finished sharply higher on Friday following gains from the resource stocks and the property plays.

For the day, the index spiked 30.08 points or 1.25 percent to finish at 2,439.63 after trading between 2,405.27 and 2,439.98. The Shenzhen Composite Index jumped 13.82 points or 1.4 percent to end at 976.62.

Among the gainers, China Coal Energy collected 2 percent, while China Shenhua Energy added 1.3 percent, Yanzhou Coal Mining surged 2.9 percent, Poly Real Estate climbed 3.5 percent, China Vanke jumped 3.9 percent and Gemdale spiked 4.9 percent.

The lead from Wall Street remains ambiguous as stocks showed a lack of direction on Friday with traders reluctant to make any significant moves. The major averages lingered near the unchanged line for most of the session, eventually ending the day mixed pending questions about whether the global economic situation supports further upside for the markets.

Traders largely shrugged off a report from Thomson Reuters and the University of Michigan showing that the consumer sentiment index for February was upwardly revised to 75.3 from the mid-month reading of 72.5. Economists had expected the index to be upwardly revised to 73.0 after showing 75.0 in January. The index is now at its highest level since February of 2011.

A separate report from the Commerce Department showed that new home sales slipped 0.9 percent to an annual rate of 321,000 in January from the revised December rate of 324,000. Economists had expected new home sales to edge up to 315,000 from the 307,000 originally reported for the previous month.

Among individual stocks, Nordson (NDSN) and Salesforce.com (CRM) posted strong gains after reporting better than expected quarterly results. Meanwhile, J.C. Penney (JCP) ended the day modestly lower after the department store operator reported a fourth quarter loss compared to a year-ago profit. Excluding restructuring charges, however, the company reported a profit that exceeded analyst estimates.

After reaching a high above the key 13,000 level, the Dow gave back some ground, closing down 1.74 points or less than a tenth of a percent at 12,982.95. Meanwhile, the NASDAQ rose 6.77 points or 0.2 percent to 2,963.75 and the S&P 500 climbed 2.25 points or 0.2 percent to 1,365.74. Despite the mixed performance on the day, the major averages all posted modest gains for the week. The NASDAQ advanced by 0.4 percent, while the Dow and the S&P 500 both rose by 0.3 percent.

by RTT Staff Writer

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