logo
Plus   Neg
Share
Email

China Shares Poised To Snap Losing Streak

Ahead of Friday's holiday for the Dragon Boat Festival, the China stock market had moved lower in six straight sessions, sliding more than 85 points or 2.8 percent along the way. The Shanghai Composite Index now rests just above the 2,825-point plateau although it may stop the bleeding on Monday.

The global forecast for the Asian markets is positive on an improved outlook for interest rates and a surge in crude oil prices. The European and U.S. markets were up on Friday and the Asian markets are tipped to follow that lead.

The SCI finished sharply lower on Thursday following losses from the financial shares, property stocks and oil and insurance companies.

For the day, the index tumbled 33.62 points or 1.18 percent to finish at 2,827.80 after trading between 2,822.19 and 2,862.33. The Shenzhen Composite Index plummeted 31.07 points or 2.08 percent to end at 1,463.70.

Among the actives, Industrial and Commercial Bank of China shed 0.52 percent, while China Merchants Bank eased 0.15 percent, China Life Insurance added 0.04 percent, Ping An Insurance lost 0.50 percent, PetroChina dropped 0.99 percent, China Shenhua Energy fell 0.26 percent, Gemdale slid 0.34 percent, Poly Developments dipped 0.16 percent, China Vanke rose 0.33 percent and China Petroleum and Chemical (Sinopec), Bank of China and China Construction Bank were unchanged.

The lead from Wall Street is solid as stocks extended recent gains, moving sharply higher on Friday.

The Dow climbed 263.28 points or 1.02 percent, while the NASDAQ spiked 126.55 points or 1.66 percent to 7,742.10 and the S&P 500 rose 29.85 points or 1.05 percent to 2,873.34. For the week, the Dow surged 4.7 percent, the NASDAQ jumped 3.9 percent and the S&P was up 4.4 percent.

The continued strength on Wall Street reflected optimism that disappointing U.S. jobs data could spur the Federal Reserve to lower interest rates in the near future. The Labor Department's closely watched monthly jobs report showed a substantial slowdown in the pace of U.S. job growth in May.

Stocks remained firmly positive after President Donald Trump said there is a good chance the U.S. and Mexico will reach an agreement to avert his threatened 5 percent tariff on all Mexican imports.

Crude oil futures ended sharply higher for a second straight session on Friday, amid signs OPEC will extend output cuts beyond June. West Texas Intermediate crude oil futures for July ended up $1.40 or 2.7 percent at $53.99 a barrel.

Closer to home, China will release May data for imports, exports and trade balance later today. Imports are expected to fall 3.3 percent on year after rising 4.0 percent in April. Exports are called lower by 3.8 percent after inking 2.7 percent in the previous month. The trade surplus is pegged at $23.20 billion, up from $13.84 billion a month earlier.

For comments and feedback contact: editorial@rttnews.com

Market Analysis

Follow RTT