China Bourse May Crack Resistance At 3,600 Points

The China stock market on Friday ended the two-day slide in which it had stumbled more than 40 points or 1.2 percent. The Shanghai Composite Index now sits just above the 3,590-point plateau and it may add to its winnings on Monday.

The global forecast for the Asian markets is positive in response to U.S. employment data and rising crude oil prices. The European and U.S. markets were up and the Asian bourses are tipped to open in similar fashion.

The SCI finished slightly higher on Friday following gains from the financials, weakness from the resource stocks and a mixed picture from the properties.

For the day, the index rose 7.63 points or 0.21 percent to finish at 3,591.84 after trading between 3,561.89 and 3,618.80. The Shenzhen Composite Index gathered 15.01 points or 0.63 percent to end at 2,407.65.

Among the actives, Industrial and Commercial Bank of China collected 0.39 percent, while Bank of China added 0.32 percent, China Construction Bank gained 0.59 percent, China Merchants Bank rallied 2.22 percent, Bank of Communications rose 0.41 percent, China Life Insurance spiked 2.08 percent, Jiangxi Copper tanked 2.78 percent, Aluminum Corp of China (Chalco) skidded 1.34 percent, Yanzhou Coal fell 0.34 percent, PetroChina retreated 1.26 percent, China Petroleum and Chemical (Sinopec) shed 0.66 percent, Baoshan Iron advanced 0.77 percent, Poly Developments was up 0.22 percent, China Vanke declined 1.27 percent, Beijing Capital Development eased 0.17 percent and Gemdale was unchanged.

The lead from Wall Street is solid as the major averages opened firmly higher on Friday and picked up steam as the session progressed.

The Dow climbed 179.39 points or 0.52 percent to finish at 34,756.39, while the NASDAQ jumped 199.99 points or 1.47 percent to end at 13.814.49 and the S&P 500 advanced 37.04 points or 0.88 percent to close at 4,229.89. For the week, the Dow rose 0.7 percent, the NASDAQ added 0.5 percent and the S&P rose 0.6 percent.

The strength on Wall Street came after the Labor Department report showed job growth in the U.S. reaccelerated in May but fell short of estimates, while the jobless rate fell to 5.8 percent.

Traders viewed the weaker than expected job growth as a Goldilocks situation, where the economy is expanding but not fast enough to encourage the Federal Reserve to tighten monetary policy.

Crude oil prices moved higher Friday amid rising hopes for increased demand and the recent OPEC decision to gradually increase crude output. West Texas Intermediate Crude oil futures for July ended up $0.81 or 1.2 percent at $69.62 a barrel, the highest settlement since October 2018.

Closer to home, China will release May figures for imports, exports and trade balance later this morning. Imports are expected to skyrocket 51.5 percent on year after jumping 43.1 percent in April. Exports are called higher by an annual 32.1 percent after rising 32.3 percent in the previous month. The trade surplus is pegged at $50.5 billion, up from $42.85 billion a month earlier.

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