The China stock market turned right back to the downside again on Thursday, one session after it had snapped the two-day slide in which it had given away more than 25 points or 1.2 percent. The Shanghai Composite Index ended just above the 2,110-point plateau, and now investors are expecting additional selling pressure when the market kicks off trade on Friday.
The global forecast for the Asian markets remains negative following comments by European Central Bank President Mario Draghi, who told reporters that the central bank "may undertake outright open market operations" - but traders were disappointed by the lack of details. Adding to the cautious sentiment, the U.S. Labor Department will release monthly employment data for July later in the day. The European and U.S. markets were down, and the Asian bourses figure to follow suit.
The SCI finished modestly lower on Thursday, dragged lower by weakness from the metal stocks and the properties.
For the day, the index fell 12.18 points or 0.57 percent to finish at 2,111.18 after trading between 2,103.50 and 2,126.46. The Shenzhen Composite Index dipped 0.9 percent to end at 855.28.
Among the decliners, China Vanke plummeted 6.8 percent, while Poly Real Estate plunged 9.2 percent, Gemdale slid 6.4 percent, Jiangxi Copper shed 1.4 percent, Chalco fell 0.7 percent and Zijin Mining Group retreated 1.1 percent.
Wall Street puts forth a pessimistic lead as stocks ended Thursday's session mostly lower, extending the downward move seen in the three previous sessions.
Much of the weakness stemmed from a negative reaction to comments by European Central Bank President Mario Draghi, who spoke at a press conference following the central bank's monetary policy meeting. At the meeting, the ECB decided to leave interest rates unchanged following a quarter basis point cut at its previous meeting last month.
Draghi told reporters that the central bank "may undertake outright open market operations," but traders seemed disappointed that there was not more conviction behind Draghi's remarks. Last week, Draghi promised to do whatever is necessary to support the beleaguered eurozone, leading to a rally on Wall Street.
Traders shrugged off a report from the Labor Department showing that initial jobless claims crept up to 365,000 in the week ended July 28 from the previous week's revised figure of 357,000. Economists had expected jobless claims to climb to 370,000 from the 353,000 originally reported for the previous week.
Later this morning, the U.S. Labor Department will release the keenly awaited non-farm payroll data for July. Economists expect that employment rose by about 100,000 jobs following a weaker than expected increase of 80,000 jobs in June. The unemployment rate is expected to remain unchanged at 8.2 percent.
The major averages climbed well off their worst levels going into the close but still ended the day in the red. The Dow fell 92.18 points or 0.7 percent to 12,878.88, while the NASDAQ slipped 10.44 points or 0.4 percent to end at 2,909.77 and the S&P 500 dropped 10.14 points or 0.7 percent to 1,365.00.
In economic news, China will on Friday post the July results of its non-manufacturing purchasing managers' index and the HSBC services PMI. The non-manufacturing PMI saw a score of 56.7 in June, while the Services PMI came in at 52.3.
by RTT Staff Writer
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