The China stock market has finished lower now in back-to-back sessions, retreating more than 60 points or 2 percent on its way to a fresh four-month closing low. The Shanghai Composite Index is clinging to the 2,970-point plateau, and now analysts are expecting a mild recovery at the opening of trade on Monday.
The global forecast for the Asian markets is cautiously optimistic after many of the bourses suffered brutal losses at the end of last week. Firmer commodity prices - especially gold and oil - will provide support, along with technology, airline and financial stocks. The European markets ended sharply lower, while the U.S. bourses tracked slightly higher - and now the Asian markets are also predicted to move to the upside.
The SCI finished sharply lower on Friday, thanks to heavy losses among the metal and energy stocks, as well as the property shares.
For the day, the index plummeted 55.91 points or 1.87 percent to finish at 2,939.40 after trading between 2,918.91 and 2,959.23. The Shenzhen Component Index lost 252.34 points or 2.07 percent to finish at 11,917.14 for a combined turnover of 193.4 billion yuan. Losers outnumbered gainers by 722 to 157 in Shanghai and 697 to 162 in Shenzhen.
Among the decliners, China Shenhua Energy shed 3.15 percent, while Jiangxi Copper lost 1.22 percent, Zijin Mining Group fell 2.36 percent, Aluminum Corp. of China was down 3.03 percent, China Vanke declined 2.23 percent and Poly Real Estate Group was down 3.98 percent.
The lead from Wall Street is mildly positive as stocks were able to advance by modest margins on Friday after a significantly volatile session. The major averages closed in positive territory after spending most of the day in the red.
Stocks plunged in the early afternoon on concerns about the labor market, but the major averages staged a strong recovery amid speculation the European Union would concoct a solution to Greece's debt problems.
The recovery was also spurred by a report from the Federal Reserve showing that the contraction in consumer credit markets slowed by much more than expected. Consumer credit fell by $1.73 billion in December after a revised $21.8 billion decline in November. Economists had been expecting credit to decrease by a much more substantial $10.0 billion compared to the $17.5 billion decrease originally reported for the previous month.
Stocks saw some weakness after the Labor Department reported that non-farm payroll employment declined by 20,000 jobs in January following a revised decrease of 150,000 jobs in December. Economists had forecast employment to edge up by 15,000 jobs compared to the loss of 85,000 jobs originally reported for the previous month.
The Labor Department report also said that the unemployment rate unexpectedly fell to 9.7 percent in January from 10.0 percent in December. The decrease surprised economists, who had expected the unemployment rate to remain unchanged at 10.0 percent.
Trucking company Con-way Inc. (CNW) reported a fourth quarter loss that narrowed from last year and saw revenues that came in ahead of Street estimates.
Meat products producer Tyson Foods Inc. (TSN) recorded a first-quarter profit and revenues that topped expectations, while Aetna (AET) failed to meet fourth-quarter profit forecasts amid growing medical costs but beat projections on the revenue front.
The Dow gained 10.05 points or 0.1 percent to end at 10,012.23, the NASDAQ advanced by 15.69 points or 0.7 percent to 2,141.12 and the S&P 500 rose by 3.08 points or 0.3 percent to 1,066.19. Despite the recovery, the major averages fell for a fourth straight week due largely to the sell-off seen on Thursday. The Dow slipped by 0.5 percent, while the NASDAQ and the S&P 500 declined by 0.3 percent and 0.7 percent, respectively.
In economic news, China's current account surplus dipped 35 percent in 2009 to US$284.1 billion, the State Administration of Foreign Exchange reported on Friday. The surplus was equivalent to 5.8 percent of gross domestic product in 2009.
The capital and financial account surplus totaled US$109.1 billion in 2009. The surplus includes US$36.5 billion of net inflows from foreign direct investment, the regulator said.
On the corporate front, China Nutrifruit Group Limited saw third quarter net earnings of $4.63 million or $0.11 per share, compared to $3.2 million or $0.09 per share last year. Net sales grew to $17.82 million from $13.87 million in the prior year quarter.
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