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China Shares May Test Support At 2,700 Points

(RTTNews) – The China stock market has finished higher now in two straight sessions, collecting more than 60 points or 2.2 percent in the process. The Shanghai Composite Index finished just above the 2,710-point plateau, but now analysts are expecting to see modest selling pressure when the market opens for business on Friday.

The global forecast for the Asian markets is broadly negative, with a decline in oil and gold prices expected to lead the way lower. Property stocks are also expected to fall under pressure, as are technology shares. The European markets finished mostly higher, while the U.S. bourses ended notably lower – and the Asian markets are also expected to track to the downside.

The SCI finished sharply higher on Thursday, thanks to solid gains from the financial stocks, oil companies and other commodities.

For the day, the index surged 54.79 points or 2.06 percent to finish at 2,710.51 after trading between 2,646.90 and 2,711.07 on turnover of 90.74 billion yuan. The Shenzhen Composite Index added 2.57 percent to finish at 1,038.24 on turnover of 61.84 billion yuan.

Among the gainers, Xishan Coal Electricity Group surged 5.73 percent, while Pingdingshan Tianan Coal Mining added 5.12 percent, Henan Shenhuo Coal and Power gained 4.73 percent, China Petroleum & Chemical Corporation (Sinopec) climbed 3.1 percent, PetroChina was up 0.99 percent, Bank of Communications jumped 2.95 percent, Bank of China gained 1.72 percent and China Construction Bank was up 0.58 percent.

The lead from Wall Street is pessimistic as stocks fell by steep margins on Thursday, with traders seeking safety in a volatile marketplace, prompting a broad sell-off in stocks. The move came despite an upbeat jobs report and continued strong corporate earnings, as investors continued to express doubt regarding overseas debt.

On the economic front, the Labor Department reported that first-time claims for unemployment benefits showed another modest decrease in the week ended May 8, although the number of claims exceeded estimates due to an upward revision to the previous week’s data.

Initial jobless claims edged down to 444,000 from the previous week’s revised figure of 448,000. Economists had expected jobless claims to slip to 440,000 from the 444,000 originally reported for the previous week. With the modest decrease, jobless claims fell for the fourth consecutive week, further offsetting the notable increases seen in late March and early April.

In other economic news, RealtyTrac revealed that foreclosure filings on U.S. properties in April declined 2 percent from the previous year. In its U.S. Foreclosure Market Report for April, RealtyTrac said one in every 387 U.S. housing units received a foreclosure filing during the month.

With earnings season winding down, Kohl’s Corp. (KSS) reported first-quarter net income and revenues that topped Wall Street forecasts. However, the retailer issued second-quarter and fiscal 2010 guidance that was short of analyst estimates.

Also on the corporate front, Sybase (SY) rose 14.4 on news that SAP (SAP) has agreed to acquire the company in a deal worth $5.8 billion or $65 a share.

The major averages saw further downside in late-session dealing, closing near their session lows. The Dow dipped by 113.96 points or 1.1 percent to 10,782.95, the NASDAQ closed down 30.66 points or 1.3 percent at 2,394.36 and the S&P 500 slid by 14.23 points or 1.2 percent to 1,157.44.

In corporate news, China Recycling Energy saw first-quarter net income increase to $2.2 million or $0.05 per share from $1.1 million or $0.02 per share a year earlier. Non-GAAP net income improved to $3.9 million or $0.08 per share from $2.1 million or $0.05 per share for the same period of 2009. Revenues for the quarter grew 134 percent to $10.12 million from $4.32 million in the comparable period.

Also, China Green Agriculture saw third-quarter net income of $5.3 million or $0.22 per share, compared to net income of $3.9 million or $0.21 per share in the same quarter last year. Operating income for the quarter was $6.2 million, up 39.4 percent from $4.5 million in the prior year quarter.

Also, China Real Estate Information said its first-quarter net income slipped 47 percent to $1.9 million from $3.6 million for the same quarter in 2009. GAAP net income per ADS dipped to $0.01 from $0.05 last year. First-quarter non-GAAP net income improved to $10.3 million from $4.7 million a year ago. Non-GAAP net income per ADS remained flat at $0.07 for the latest quarter. First quarter total revenues were $27.2 million in 2010, an increase of 123 percent from $12.2 million for the same quarter in 2009.

Finally, China Gerui Advanced Materials Group saw first-quarter net income increased to US$11.53 million from US$9.13 million prior year. Earnings per share were US$0.25 compared to US$0.26 a year ago. Revenue was US$61.82 million compared to US$46.97 million last year. Analysts expected revenue of US$55.20 million for the quarter.

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