Even though Friday ended mixed, it was a decisive win for the bulls. The markets were down early, buffeted by a string of poor earnings, but the Dow rallied back, and the NASDAQ only slipped a little.
Clearly, the bulls have the momentum, and so far this week, things are looking up — at least overseas.
Asian markets had a good night, with the Nikkei crossing back above 10,000 and China experiencing yet another insane IPO
Toll-road operator Sichuan Expressway rocketed on its debut in Shanghai, more than tripling from its initial public offering price of 3.60 yuan (53 U.S. cents) to end at 10.90 yuan on a buying frenzy. The stock surged as high as 15.25 yuan during the session and trading had to be suspended twice due to their “unusual” performance.
“Sichuan Expressway’s debut is adding steam to the market’s frenzy,” said Jacky Zhang at CSC International.
The performance lifted Sichuan’s Hong Kong-listed shares 5.6%. The benchmark Hang Seng Index, meanwhile, rose 1.4% to end at 20251.62 – its first finish above the psychologically-crucial 20000-point level since September.
You knew this issue was going to be a monster a while back, when reports of Chinese bond auctions failing cited Sichuan Expressway as a company that investors were saving up for.
Europe, too, is catching the wave of international exuberance:
WSJ: The Dow Jones pan-European Stoxx 600 Index gained 0.6% to 220.9. London’s FTSE 100 Index rose 0.2% to 4587.65, Frankfurt’s DAX Index advanced 0.8% to 5269.14 and the CAC-40 Index in Paris climbed 0.7% to 3388.33.
The rally follows several days of straight gains, with London’s FTSE heading for its eleventh day of consecutive gains, its longest winning streak for four years.
ING described the current optimism as “infectious,” with analysts moving recommendations in a positive direction and upgrading earnings forecasts. “This should underpin recent gains and is likely to add further fuel to the rally,” the brokerage said.
It noted that in March, earnings momentum was negative in all sectors, except health. Now half of all sectors are seeing upgrades, led by resources, financials and technology.
Just curious, could analysts (as a class) be anymore behind the curve?
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