The China stock market put on less than a point on Friday, but that was enough to extend its winning streak to three sessions, gathering more than 20 points or 1 percent in that span. The Shanghai Composite Index finished just above the 2,185-point plateau, and now traders are anticipating additional support when the market opens on Monday.
The global forecast for the Asian markets is broadly positive following positive earnings news from the United States. Financial giant JP Morgan reported better than expected second quarter earnings despite a massive trading loss. In addition, Wells Fargo reported second quarter earnings that rose year-over-year and came in above analyst estimates. The European and U.S. markets finished firmly higher, and the Asian bourses are expected to open in similar fashion.
The SCI finished flat on Friday as gains from the financial shares were offset by weakness from the metal stocks.
For the day, the index added 0.40 points or 0.02 percent to finish at 2185.90 after trading between 2,177.92 and 2,198.66. The Shenzhen Composite Index dropped 0.6 percent to end at 922.62.
Among the actives, Bank of Ningbo jumped 1 percent, while AgBank added 0.4 percent, Industrial Securities fell 1.1 percent, Jiangxi Copper shed 1.4 percent, Chalco eased 0.6 percent and Yunnan Tin lost 0.9 percent.
The lead from Wall Street is upbeat as stocks showed a strong move to the upside on Friday after trending lower in the previous six sessions. The markets benefited from a positive reaction to Chinese economic data as well as JP Morgan's (JPM) quarterly results.
China reported that GDP increased at its slowest annual rate in over three years, although it was not as slow as some had feared. The report also showed that Chinese GDP increased by 1.8 percent compared to the previous quarter, exceeding forecasts.
Traders also reacted positively to quarterly results from financial giant JP Morgan, which reported better than expected second quarter earnings despite a massive trading loss. JP Morgan said that the trading loss grew to $4.4 billion from its initial estimate of $2 billion but noted that its Chief Investment Office will no longer trade a synthetic credit portfolio. Shares of JP Morgan rose by 6 percent on the news.
Shares of Wells Fargo (WFC) also moved notably higher after the company reported second quarter earnings that rose year-over-year and came in above analyst estimates. Wells Fargo climbed 3.2 percent.
Meanwhile, traders largely shrugged off a report from Thomson Reuters and the University of Michigan that unexpectedly showed a continued deterioration in consumer sentiment in July. The consumer sentiment index fell to 72.0 in July from the final June reading of 73.2, while economists had expected the index to edge up to 73.5.
The Labor Department also reported before the start of trading that U.S. producer prices unexpectedly rebounded in the month of June.
The major averages saw continued strength going into the close, ending the day firmly in positive territory. The Dow jumped 203.82 points or 1.6 percent to finish at 12,777.09, while the NASDAQ surged 42.28 points or 1.5 percent to end at 2,908.47 and the S&P 500 soared 22.02 points or 1.7 percent to 1,356.78.
With the day's strong gains, the major averages turned in a mixed performance for the week. While the NASDAQ still fell 1 percent for the week, the S&P 500 rose by 0.2 percent and the Dow edged up by less than 0.1 percent.
In economic news, China's economic growth eased to a three-year low of 7.6 percent year-on-year in the second quarter, the National Bureau of Statistics said on Friday, matching forecasts after GDP climbed 8.1 percent in the first quarter.
Also, China's industrial production increased 9.5 percent annually in June compared to expectations for a 9.8 percent growth. In May, production was up 9.6 percent.
Retail sales were up 13.7 percent year-on-year in June, faster than the expected 13.4 percent increase. This followed a 13.8 percent rise in the previous month.
Fixed asset investment rose 20.4 percent in the first six months of the year compared to the same period last year. This was expected to increase 20 percent on an annual basis.
by RTT Staff Writer
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