6/11/2012 8:50 PM ET
(RTTNews) – The China stock market on Monday halted the three-day slide in which it had declined more than 30 points or 1.4 percent en route to a 10-week closing low. The Shanghai Composite Index settled just above the 2,300-point plateau, although now investors are not expecting to see the market sustain those gains when it opens on Tuesday.
The global forecast for the Asian markets is broadly negative as markets are expected to open lower on Tuesday, with bargain hunting likely on the menu following solid gains in the previous session. Most of the regional bourses were overbought on Monday in a kneejerk reaction to weekend news of the Spanish bailout – but that optimism quickly dissipated on concerns that it treats the symptoms and not the disease. The European markets were mixed and the U.S. bourses were down – and the Asian markets figure to follow the latter lead.
The SCI finished sharply higher on Monday following gains from the property stocks and metal shares.
For the day, the index spiked 24.41 points or 1.07 percent to finish at 2,305.86 after trading between 2,278.16 and 2,311.77. The Shenzhen Composite Index climbed 16.76 points or 1.8 percent to end at 945.62.
Among the gainers, Gemdale surged 4.0 percent, while Poly Real Estate Group climbed 3.2 percent, China Vanke jumped 3.1 percent, Zhuzhou Smelter Group spiked 3.9 percent, Shenzhen Zhongjin Lingnan Nonfemet collected 2.8 percent and Chalco gathered 2.3 percent.
The lead from Wall Street is weak as stocks finished sharply lower on Monday. Early optimism about an aid package to Spain gave way early in the session, with investors questioning whether the move represents a long-term fix to the euro-zone debt crisis.
Wall Street saw an advance at the outset of trading in response to the initial wave of relief in response to the Spanish bailout. The upward momentum quickly gave way, however, and stocks were in negative territory by mid-morning.
Europe was in focus throughout the session. Governments of the euro-zone countries have agreed to lend Spain up to 100 billion euros to shore up the country’s banks. The funds will help ease concern about disruptions in Spain’s financial system – the latest concern in the euro-zone’s ongoing debt crisis.
Corporate news was scarce on Monday. With the end of the second quarter coming in a few weeks, few companies are scheduled to report their quarterly results in the near term. Still, some companies have released revised forecasts as Forest Laboratories (FRX) lowered its forecast for the current fiscal year.
Meanwhile, Centene Corp. (CNC) has slashed its 2012 earnings. The company now expects a profit for the fiscal year of between $1.45 and $1.65 per share. This is down from its previous outlook of $2.64 and $2.84 per share.