The China stock market has finished higher now in back-to-back sessions, rising more than 20 points or 0.95 percent along the way. The Shanghai Composite Index finished just below the 2,170-point plateau, and now traders are expecting the market to extend its gains when it kicks off trade on Thursday.
The global forecast for the Asian markets is cautiously optimistic following solid economic data from the United States. The Commerce Department reported a bigger than expected rebound in housing starts in the month of June. In addition, the Fed's Beige Book report said overall economic activity continued to expand at a modest to moderate pace in June and early July. The European and U.S. markets finished higher, and the Asian bourses are expected to follow that lead.
The SCI finished modestly higher on Wednesday as gains from the brokerages were offset by selling pressure in the property sector.
For the day, the index gathered 7.91 points or 0.37 percent to finish at 2,169.10 after trading between 2,138.79 and 2,170.30. The Shenzhen Composite Index added 2.67 points or 0.3 percent to end at 896.18.
Among the actives, Hong Yuan Securities spiked 6.1 percent, Huatai Securities surged 4.0 percent and Industrial Securities climbed 3.4 percent, while China Vanke shed 3.8 percent, China Merchants Property lost 3.5 percent, Poly Real Estate plunged 4.9 percent, Jiangxi Copper eased 0.3 percent and Yunnan Copper retreated 1.1 percent.
The lead from Wall Street is positive as stocks moved higher on Wednesday, adding to the gains posted in the previous session. The markets benefited from considerable strength that emerged among technology stocks - which moved sharply higher despite disappointing guidance from semiconductor giant Intel (INTC).
Intel reported better than expected Q2 earnings after the close of trading on Tuesday, but the company also reported weaker than expected revenues and lowered its full year revenue growth outlook. Tech stocks also benefited from bargain hunting following recent weakness in the sector, with the gain by Intel extending a recovery from the six-month closing low it set last Thursday.
In addition, the Commerce Department reported that housing starts jumped 6.9 percent to an annual rate of 760,000 in June from the revised May estimate of 711,000. Economists had expected starts to climb to 745,000 from the 708,000 originally reported for the previous month. On the other hand, building permits, an indicator of future housing demand, fell by 3.7 percent to an annual rate of 755,000 in June from the revised May rate of 784,000.
In other economic news, the Fed's Beige Book report said overall economic activity continued to expand at a modest to moderate pace in June and early July. The report also said employment levels grew at a tepid pace since the last report and noted that price inflation was modest across most areas of the country. Looking ahead, the Fed said contacts remained cautiously optimistic about future business conditions.
Traders also kept an eye on Federal Reserve Chairman Ben Bernanke's second day of testimony on Capitol Hill, with the Fed Chief facing questions from the House Financial Services Committee. Bernanke's prepared remarks were unchanged from those he delivered to the Senate Banking Committee on Tuesday. He reiterated that the Fed is prepared to take further action if necessary and continued to urge Congress to address the upcoming fiscal cliff.
The major averages hovered firmly in positive territory in afternoon trading, holding on to strong gains. The Dow rose 103.16 points or 0.8 percent to finish 12,908.70, while the NASDAQ jumped 32.56 points or 1.1 percent to end at 2,942.60 and the S&P 500 climbed 9.11 points or 0.7 percent to 1,372.78.
In economic news, house prices in China increased marginally in June from a month earlier, the National Bureau of Statistics said on Wednesday. Out of the 70 major cities surveyed by the NBS, only 21 recorded a month-on-month decline in home prices in June compared to 40 in May.
Among the major cities, price growth was recorded in Beijing, Shanghai and Guangzhou on a monthly basis. On an annual basis, prices declined in most of the cities. Prices fell in 57 of the 70 cities during the month.
by RTT Staff Writer
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