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Additional Support Anticipated For China Stock Market

The China stock market rebounded on Friday, one session after it had snapped the three-day winning streak in which it had advanced almost 100 points or 3.1 percent. The Shanghai Composite Index now sits just above the 3,310-point plateau and it may add to its winnings on Monday.

The global forecast for the Asian markets is upbeat on solid earnings from technology stocks and anticipation for new stimulus measures. The European markets were down on Friday and the U.S. bourses were up and the Asian markets figure to follow the latter lead.

The SCI finished modestly higher on Friday following mixed performances from the financial shares, property stocks and oil and insurance companies.

For the day, the index advanced 23.19 points or 0.71 percent to finish at 3,310.01 after trading between 3,261.61 and 3,333.79. The Shenzhen Composite Index jumped 29.54 points or 1.33 percent to end at 2,256.87.

Among the actives, Industrial and Commercial Bank of China shed 0.40 percent, while Bank of China lost 0.30 percent, China Merchants Bank collected 0.69 percent, China Life Insurance advanced 0.97 percent, Ping An Insurance eased 0.17 percent, PetroChina slid 0.22 percent, China Petroleum and Chemical (Sinopec) rose 0.25 percent, China Shenhua Energy sank 0.78 percent, Gemdale added 0.43 percent, Poly Developments gathered 0.52 percent, China Vanke dipped 0.15 percent and China Construction Bank and China Minsheng Bank were unchanged.

After considerable volatility, the lead from Wall Street ended up to be positive thanks to a late-day surge on Friday, fueled by gains from the technology stocks.

The Dow added 114.62 points or 0.44 percent to finish at 26,428.32, while the NASDAQ soared 157.47 points or 1.49 percent to end at 10,745 and the S&P 500 rose 24.90 points or 0.77 percent to close at 3,271.12. For the week, The Dow eased 0.2 percent, the NASDAQ surged 3.7 percent and the S&P jumped 1.7 percent.

The higher close on Wall Street partly reflected a positive reaction to better than expected quarterly results from several leading technology companies, including Apple (AAPL), Amazon (AMZN) and Facebook (FB).

The upbeat tech earnings news overshadowed concerns about stalled negotiations over a new coronavirus stimulus package. Lawmakers appear at an impasse as the attempt to reach a compromise between a $1 trillion GOP relief proposal and the $3.4 trillion bill passed by the Democratic-controlled House in May.

In economic news, the Commerce Department said personal income slumped more than expected in June, although there was another substantial increase in personal spending. A separate report from the University of Michigan said consumer sentiment deteriorated more than expected in July.

Crude oil futures closed higher on Friday, buoyed by a report from the U.S. Energy Information Administration that said oil production fell sharply in May. West Texas Intermediate Crude oil futures for September ended up $0.35 or 0.9 percent at $40.27 a barrel.

Closer to home, China will see July results for the manufacturing PMI from Caixin later this morning, with forecasts suggesting a score of 51.3 - up slightly from 51.2 in June.

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