The China stock market has closed higher now in six straight sessions, surging more than 140 points or 6 percent in that span. The Shanghai Composite Index settled just below the 2,430-point plateau, although now analysts are predicting a lower open on Tuesday.
The global forecast for the Asian markets is soft, thanks to the latest concerns out of Europe. Profit taking also may play a role as several of the regional bourses are overbought. Spanish Prime Minister Mariano Rajoy is facing calls to resign over a corruption scandal, while, Silvio Berlusconi is gaining support in Italy, ahead of the upcoming Italian elections. Investors fear that if Berlusconi regains control of the country, he could undo recent reforms in Italy. The European and U.S. markets were down and the Asian bourses are expected to follow that lead.
The SCI finished modestly higher on Monday following gains from the financial shares and the coal miners.
For the day, the index added 9.13 points or 0.38 percent to finish at 2,428.15 after trading between 2,417.58 and 2,440.38. The Shenzhen Composite Index lost 0.9 percent to end at 935.80.
Among the gainers, Bank of China climbed 1.6 percent, while China Construction Bank collected 0.6 percent, Industrial and Commercial Bank of China was up 0.5 percent, Ping An advanced 1.4 percent, Yanzhou Coal Mining surged 6.7 percent and Henan Shenhuo Coal spiked 4.8 percent.
The lead from Wall Street is negative as stocks moved sharply lower on Monday, giving back ground after moving notably higher in recent weeks. The pullback came as traders cashed in on recent gains, which lifted the Dow and the S&P 500 to five-year closing highs, leading some analysts to suggest that the markets have become overbought.
On the U.S. economic front, the Commerce Department reported that factory orders added 1.8 percent in December following a revised 0.3 percent decrease in November. Economists had expected orders to jump by 2.4 percent compared to the marginal increase originally reported for the previous month.
Selling pressure may also have been generated by signs of another budget showdown on Capitol Hill, with Senate Majority Leader Harry Reid, D-Nev., saying that any deal to avoid across-the-board spending cuts must include increased revenues.
While President Barack Obama has also called for increased revenues, Republicans have argued that they are done raising revenues after the fiscal cliff deal boosted tax rates on families making more than $450,000 a year.
Among individual stocks, shares of Gannett (GCI) fell even though the newspaper company reported better than expected fourth quarter results. Food distribution giant Sysco (SYY) also dropped after reporting Q4 earnings that missed estimates.
On the other hand, shares of Acme Packet (APKT) moved sharply higher after the networking company agreed to be acquired by Oracle (ORCL) for $2.1 billion. Acme Packet surged 23.7 percent to an eleven-month closing high.
The major U.S. averages were down on Monday as the Dow slid 129.71 points or 0.9 percent to finish at 13,880.08, while the NASDAQ plunged 47.93 points or 1.5 percent to close at 3,131.17, and the S&P 500 tumbled 17.46 points or 1.2 percent to end at 1,495.71.
In economic news, China will on Tuesday see January results for the HSBC Services PMI; in December, it came in at 51.7.
by RTT Staff Writer
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