The China stock market has finished lower now in back-to-back sessions, retreating more than 40 points or 1.5 percent along the way. The Shanghai Composite Index finished just above the 2,655-point plateau, and now the market is likely to lack direction on Friday ahead of key trade data due out later in the session.
The global forecast for the Asian markets is fairly positive, thanks to better than expected employment data from the United States. Financials and pharmaceuticals are expected to provide support, although gold, property and airline stocks may weigh. The European and U.S. markets finished in positive territory, and the Asian markets are expected to follow that lead.
The SCI finished sharply lower on Thursday, thanks to heavy damage from the financial shares and the property stocks.
For the day, the index plunged 38.94 points or 1.44 percent to finish at 2,656.35 after trading between 2,651.60 and 2,698.64. The Shenzhen Component Index plummeted 257.43 points or 2.2 percent to finish at 11,465.35 for a combined turnover of 297.99 billion yuan. Losers outnumbered gainers by 706 to 169 in Shanghai and 797 to 253 in Shenzhen.
Among the decliners, Industrial and Commercial Bank of China shed 0.73 percent, while Bank of China lost 0.89 percent, China Vanke was down 3.38 percent and Poly Real Estate Group plunged 4.07 percent.
The lead from Wall Street is cautiously optimistic as stocks ended Thursday's session with modest gains, as jobless claims fell by more than forecast - although dark clouds from the European financial crisis limited the upside.
Initial upside in the markets came after data from the Labor Department showed that initial jobless claims fell to 451,000 in the week ended September 4th from the previous week's revised figure of 478,000.
Economists had only been expecting jobless claims to edge down to 470,000 from the 472,000 originally reported for the previous week.
With the bigger than expected decrease, jobless claims fell to their lowest level since falling to a nearly two-year low of 427,000 in the week ended July 7, although they remain at a relatively high level.
Stocks came off their highs in mid-afternoon trading following reports that Deutsche Bank (DB), Germany's largest bank, is mulling a share offering in order to raise roughly $11 billion in additional capital. The news served as a reminder of the continued turmoil among Europe's financial institutions.
The major averages saw some downside in late-session dealing but managed to end the day above the unchanged line. The Dow edged up by 28.23 points or 0.3 percent to end at 10,415.24, the NASDAQ rose by 7.33 points or 0.3 percent to 2,236.20 and the S&P 500 advanced by 5.31 points or 0.5 percent to 1,104.18.
In economic news, China will on Friday release August figures for imports, exports and trade balance. Imports are expected to climb 27.5 percent on year after adding an annual 22.7 percent in July. Exports are called higher by 35 percent on year following the 38.1 percent surge in the previous month. The trade balance is expected to show a surplus of $26.9 billion, down from the $28.73 billion surplus a month earlier.
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