Chinese Shanghai Composite Index set an intraday record of 4,054.75, before easing to 4049.70, for a gain of 0.9% on the day. The index closed at a record high for the fourth consecutive session, as more retail investors appeared into the market expecting to profit from its strongl run. On Wednesday, Chinese stock markets recorded greater than the rest of Asia combined value of shares, including Japan.

In terms of turnover, China is now the second-largest market in the world but in terms of market capitalization it is less than half the size of Japan. The two major indices, Shenzhen and Shanghai have a combined market capitalization of $2,200 billion compared to Japan’s $4,700 billion, the UK almost $4,000 billion and the $16,500 billion of the U.S.

China Petroleum & Chemical added 5.5% after gaining 1.3% Wednesday, Baoshan Iron & Steel rose 6% following a 4.7% gain in the previous session and China Yangtze Power advanced 2.7% after adding 2.9% Wednesday.

Australian S&P/ASX 200 closed up 0.2% to 6,355.50 on gains in banking shares. Rio Tinto fended down 2.8% as hopes for an imminent takeover bid from larger rival BHP Billiton subsided. Shares of BHP Billiton dropped 0.3%. New Zealand NZSX-50 also set a new record, adding 0.4% and Indonesian JSX Composite edged 0.1% higher to 2,040.26.


8:15AM Retailers posted weaker-than-expected April sales.
Retailers attracted attention early Thursday with the release of April sales figures. The majority of them reported robust March same-store sales due largely to an early Easter, tipping off investors that their April sales would come below expectations. Among the first to report April same-store sales were Costco Wholesale, Claire’s Stores, Mothers Work, and Chico FAS.

Costco Wholesale (COST: chart) posted 7% increase in its same-store sales in April, beating expectations of 6.3% growth. Costco said it benefited from one extra day of sales, which resulted in a 2% lift. In the four weeks to May 6, total sales rose 12% to $4.94 billion. Wal-Mart (WMT: chart) posted a 3.5% decline in same-store sales, well below estimates of a 1.1% decrease. The world''s biggest retailer said it expects May same-store sales to rise 1% to 2%.

Claire''s Stores, Inc. (CLE: chart) said its April same-store sales fell 6%, missing estimates of same-store sales drop of 2%. Total sales for the four-week period rose 1% to $105 million.

Maternity clothing retailer Mothers Work (MWRK: chart) said its April sales at stores open at least one year dropped 14.8%, missing analyst expectations of a decline by 12%. The retailer attributed the decline to the earlier timing of Easter. Total sales for the period slipped 9.9% to $52.3 million.

Gap (GPS: chart) said its April same-store sales tumbled 16%, down from expectations of a decline of 7.1%. Total sales fell 11% in the period to $1.09 billion from $1.23 billion. Chico FAS Inc. (CHS: chart) reported comparable sales drop of 7.3%, compared to the estimate for a loss of 0.6%. Total sales increased 9.8% to $148.7 million from $135.5 million.

J. C. Penney Company, Inc. (JCP: chart) said its comparable department store sales fell 4.7%, compared to the initial guidance to be flat. Total department store sales decreased 2.7%. Limited Brands Inc. (LTD: chart) said same-store sales slipped 1% in April, slightly below expectations of 0.6% decline. Total sales rose to $688 million from $653.2 million a year earlier.

Federated Department Stores (FD: chart) posted same-store sales decline of 2.2%, missing its forecast for an increase of 2.5% to 4%. Analysts had been expecting a rise of 1.7%. Total sales dropped 2.1% to $1.84 billion.


8:00AM NY-7:00PM Mumbai Sensex ends lower on late sell-off in large-caps.

The Sensex] on BSE finished 10.28 points, or 0.07%, lower at 13,771.23. The market-breadth ended slightly negative as 1,238 stocks advanced, while 1,328 stocks declined and 68 stocks remained unchanged. Of the 30 stocks in the Sensex, 14 advanced, while the rest declined. The turnover on NSE was Rs 9,225.37 crore, compared with Rs 8,394.44 crore on Wednesday.

Economic news

Assembly poll results in Uttar Pradesh are due tomorrow. Polling for the seventh and final phase got over on Tuesday, May 8th. The UP vote is seen as a barometer of national political trends and had some influence on trading today.

Passenger car sales in the domestic market during April increased 11.26% while motorcycle sales were down, reporting a decline of 9.68%. According to figures posted by the Society of Indian Automobile Manufacturers, domestic passenger car sales during April stood at 82,934 units compared to 74,542 units in the same period last year. Motorcycle sales during the month, however, stood at 4,63,091 units as against 5,12,695 units in April 2006.

The Telecom Regulatory Authority of India may impose a revenue-sharing or an entry fee on internet service providers. Currently, internet service providers pay virtually no licence fee, unless they offer virtual private network services. Trai''s suggestions, if accepted, could raise the cost of internet and broadband services in the country. TRAI will lower the Foreign Direct Investment requirement from 100% to 74% as the requirement is for telephone service.

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