The China stock market has closed lower now in two straight sessions, retreating more than 15 points or 0.6 percent along the way. The Shanghai Composite Index ended just above the 2,370-point plateau, and now traders are expecting to see the market extend its losses when it opens on Friday.
The global forecast for the Asian markets is mixed to lower on Friday, thanks to perpetual concerns about Europe plus soft economic data from the U.S. The European Central Bank President Mario Draghi said on Thursday that the bank cannot fix the turmoil in the currency bloc and urged Eurozone leaders to come up with a 'vision' for years ahead. In addition, Ireland is voting in a referendum, although opinion polls show that the country will back the new German-backed EU fiscal treaty. Across the pond, the U.S. saw weak reports on private sector job growth and initial jobless claims. The European and U.S. markets were mostly lower, and the Asian bourses are tipped to follow suit.
The SCI finished modestly lower on Thursday following losses from the financial shares and construction companies.
For the day, the index declined 12.43 points or 0.52 percent to finish at 2,372.23 after trading between 2,362.31 and 2,382.99. The Shenzhen Composite Index added 0.4 percent to end at 967.59.
Among the decliners, China Railway Erju shed 3.8 percent, while Tengda Construction Group lost 1.2 percent, China Gezhouba Group fell 1.7 percent, China CITIC Bank dropped 1.2 percent, China Construction Bank eased 0.2 percent and Agricultural Bank of China slid 1.9 percent.
The lead from Wall Street suggests mild negativity as stocks moved sharply lower in early trading on Thursday, although the markets later staged a notable recovery. Selling pressure re-emerged in late-day trading, however, resulting in a lower close.
The early sell-off followed a slew of U.S. economic data, including reports providing further signs of sluggishness in the labor market. Considerable selling pressure was generated by a report from payroll processor ADP showing weaker than expected private sector job growth.
ADP said private sector employment rose by 133,000 jobs in May following a downwardly revised increase of 113,000 jobs in April. Economists had expected an increase of about 154,000 jobs.
A separate report from the Labor Department showed that initial jobless claims rose to 383,000 in the week ended May 26 from the previous week's revised figure of 373,000. Jobless claims had been expected to come in unchanged at the 370,000 originally reported for the previous week.
The Commerce Department also reported slower than previously estimated first quarter GDP growth, dragging stocks lower along with a report showing that Chicago-area business activity expanded at a much slower rate in May.
The afternoon rebound was spurred by reports that the International Monetary Fund is in talks to provide a bailout to Spain, although the IMF later denied the reports. The pullback that followed came as traders expressed caution ahead of Friday's closely watched monthly employment report.
The major averages all ended the day in the red but well off their worst levels of the day. The Dow edged down 26.41 points or 0.2 percent to finish at 12,393.45, while the NASDAQ fell 10.02 points or 0.4 percent to end at 2,827.34 and the S&P 500 slipped 2.99 points or 0.2 percent to 1,310.33.
In economic news, China will on Friday provide the results of its manufacturing PMI for May. The index is expected to come in at 52, down from 53.3 in April. In addition, the HSBC manufacturing PMI for May is due; it was at 49.3 in the previous month.
by RTT Staff Writer
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