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China Stocks: Support At 2,400 Points

The China stock market on Thursday snapped the two-day winning streak in which it had gathered almost 20 points or 0.8 percent. The Shanghai Composite finished just below the 2,405-point plateau, and now analysts are predicting renewed support at the opening of trade on Friday.

The global forecast for the Asian markets suggests mild upside following solid earnings news and U.S. economic data. After the bell, online retailer Amazon.com saw quarterly earnings per share breeze past Wall Street expectations, as did its quarterly sales. Earnings from Tyco International and computer chip maker Xilinx also beat forecasts. In addition, data showed that pending home rose in March. The European markets were mixed and the U.S. bourses were higher - and the Asian markets figure to split the difference.

The SCI finished barely lower on Thursday as losses from the financials were offset by gains from the metal stocks.

For the day, the index eased 2.11 points or 0.09 percent to finish at 2,404.70 after trading between 2,393.26 and 2,414.75 on volume of 104.82 billion yuan. The Shenzhen Composite Index dropped 1.62 points to end at 943.03.

Among the decliners, China Life shed 1.1 percent, while New China Life lost 2.2 percent, China Pacific Insurance fell 0.5 percent, China Construction Bank eased 0.4 percent and Industrial and Commercial Bank of China was down 0.7 percent.

Moving higher, Yunnan Aluminium soared by the 10 percent daily limit, while Sino-Platinum Metals climbed 3.9 percent and Zhongjin Lingnan Nonfemet jumped 1.2 percent.

The lead from Wall Street is upbeat as stocks moved higher on Thursday, adding the gains posted in the previous session. The markets benefited from upbeat housing data, which helped to overshadow another disappointing jobs report.

The National Association of Realtors showed a much bigger than expected increase in pending home sales in March. Calling the data another signal that the housing market is recovering, NAR said its pending home sales index rose by 4.1 percent in March following a revised 0.4 percent increase in February. Economists had expected a much more modest 1.0 percent increase.

On the other hand, the Labor Department reported a smaller than expected drop in initial jobless claims in the week ended April 21. Jobless claims edged down to 388,000 from the previous week's revised figure of 389,000 versus expectations for a fall to 375,000 from the 386,000 originally reported for the previous week.

Traders also digested the latest batch of earnings news, with share of Xilinx (XLNX) rising by 6.8 percent after the programmable computer chip maker reported better than expected fourth quarter results and provided upbeat first quarter revenue guidance. Tyco International (TYC) also ended the day higher after reporting second quarter results that exceeded analyst estimates.

In contrast, UPS (UPS) fell by 1.8 percent after the delivery giant reported first quarter earnings that rose year-over-year but came in below analyst estimates. Shares of Exxon Mobil (XOM) also closed in the red after the oil giant reported first quarter earnings that fell by more than analysts had anticipated.

The major averages pulled back off their best levels going into the close but still ended the day firmly positive. The Dow rose 113.90 points or 0.9 percent to finish at 13,204.62, while the NASDAQ climbed 20.98 points or 0.7 percent to end at 3,050.61 and the S&P 500 added 9.29 points or 0.7 percent to 1,399.98.

In corporate news, China Petroleum & Chemical Corp. (Sinopec) on Thursday reported a 35 percent decline in earnings for the first quarter, as lower margins offset a double-digit rise in revenues. Profit attributable to shareholders was 13.4 billion renminbi or 0.153 renminbi per share, compared to 20.6 billion renminbi or 0.236 renminbi per share last year. Revenues for the quarter totaled 641.4 billion renminbi, an increase of 14 percent on year.

by RTTNews Staff Writer

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