The China stock market added just a handful of points on Tuesday - but that was enough to extend its winning streak to three sessions, gathering almost 35 points or 1.5 percent in the process. The Shanghai Composite Index finished just below the 2,230-point plateau, and now analysts are forecasting further support at the opening of trade on Wednesday.
The global forecast for the Asian markets remains positive thanks to surprisingly upbeat data from the United States ahead of that country's July 4 holiday. The U.S. Commerce Department reported a larger than expected increase in factory orders in May, while U.S. automakers also had strong sales numbers in June. The upside may be limited by profit taking, as well as caution ahead of Thursday's meetings of the European Central Bank and the Bank of England, as well as Friday's U.S. employment data. The European and U.S. bourses finished higher, and the Asian markets are tipped to follow suit.
The SCI finished barely higher on Tuesday, nudged into the green by gains from the property stocks and airlines.
For the day, the index added 3.08 points or 0.14 percent to finish at 2,229.19 after trading between 2,219.05 and 2,244.83 on turnover of 60.44 billion yuan. The Shenzhen Composite Index added 3.71 points or 0.4 percent to end at 936.25.
Among the gainers, Poly Real Estate jumped 3.2 percent, while Shanghai Xinmei surged 5.6 percent, Cofco Property climbed 2.6 percent, China Vanke spiked 1.6 percent, China Eastern added 0.7 percent, China Southern gathered 0.9 percent and Air China collected 0.2 percent.
The lead from Wall Street is cautiously optimistic as stocks moved mostly higher over the course of the abbreviated trading session on Tuesday after initially showing a lack of direction. With the gains, the major averages all ended the session at their best closing levels in well over a month.
The strength on Wall Street was partly due to a report from the Commerce Department showing that factory orders rose by 0.7 percent in May following two consecutive monthly decreases. Economists had expected orders to edge up 0.1 percent. With the stronger than expected growth, the report eased some of the concerns raised by Monday's report from the Institute for Supply Management showing a contraction in manufacturing activity.
The markets also benefited from news of strong sales by U.S. automakers in the month of June. Ford (F) reported a 7 percent increase in June sales, while sales by General Motors (GM) and Chrysler jumped by 16 percent and 20 percent, respectively.
Nonetheless, trading activity remained subdued, with traders looking to get a head start on the Independence Day holiday on Wednesday. Uncertainty about Friday's monthly jobs report also helped to keep traders on the sidelines along with upcoming monetary policy announcements from Europe.
Among individual stocks, shares of Microsoft (MSFT) were higher after the software giant announced that it will take a $6.2 billion charge for the impairment of goodwill in its Online Services Division segment, mostly related to its 2007 acquisition of aQuantive.
The major averages saw some volatility in the final hour of trading in the shortened session but closed firmly in positive territory. The Dow rose 72.43 points or 0.6 percent to finish at 12,943.82, while the NASDAQ advanced 24.85 points or 0.8 percent to end at 2,976.08 and the S&P 500 climbed 8.51 points or 0.6 percent to 1,374.02.
In economic news, China will on Wednesday provide results for the HSBC Services PMI for June; it had a score of 54.7 in May.
Also, growth of China's non-manufacturing sector improved in June, a report from China Federation of Logistics and Purchasing showed Tuesday. The purchasing managers' index for the non-manufacturing sector rose to 56.7 in June from 55.2 in May. An index reading above 50 indicates expansion of the sector.
by RTT Staff Writer
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