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Renewed Consolidation Tipped For Hong Kong Stocks

2/26/2012 8:17 PM ET

The Hong Kong stock market turned right back to the upside again on Friday, one session after it had ended the two-day winning streak in which it had gathered more than 120 points or 0.6 percent. The Hang Seng Index settled just above the 21,400-point plateau, and now investors are expecting a soft start when the market kicks off trade on Monday.

The global forecast for the Asian markets is mixed with a hint of downside as investors figure to remain cautious regarding lingering concerns over the debt situation in Europe, as well as geopolitical tensions concerning Syria and Iran. Steel and oil companies are expected to provide support, with gold and airlines called lower. The European and U.S. markets were mixed but little changed on Friday, and the Asian bourses are expected to follow suit.

The Hang Seng finished slightly higher on Friday as gains from the retailers were pared by persistent weakness from the property sector.

For the day, the index collected 25.87 points or 0.12 percent to finish at 21,406.86 after trading between 21,292.40 and 21,468.93 on volume of 61.67 billion Hong Kong dollars.

Among the actives, China Overseas Land climbed 1.0 percent, Artini spiked 16.8 percent and BaWang surged 12.5 percent, while Sino Land shed 1.1 percent and Hang Lung Properties lost 1.0 percent.

The lead from Wall Street remains ambiguous as stocks showed a lack of direction on Friday with traders reluctant to make any significant moves. The major averages lingered near the unchanged line for most of the session, eventually ending the day mixed pending questions about whether the global economic situation supports further upside for the markets.

Traders largely shrugged off a report from Thomson Reuters and the University of Michigan showing that the consumer sentiment index for February was upwardly revised to 75.3 from the mid-month reading of 72.5. Economists had expected the index to be upwardly revised to 73.0 after showing 75.0 in January. The index is now at its highest level since February of 2011.

A separate report from the Commerce Department showed that new home sales slipped 0.9 percent to an annual rate of 321,000 in January from the revised December rate of 324,000. Economists had expected new home sales to edge up to 315,000 from the 307,000 originally reported for the previous month.

Among individual stocks, Nordson (NDSN) and Salesforce.com (CRM) posted strong gains after reporting better than expected quarterly results. Meanwhile, J.C. Penney (JCP) ended the day modestly lower after the department store operator reported a fourth quarter loss compared to a year-ago profit. Excluding restructuring charges, however, the company reported a profit that exceeded analyst estimates.

After reaching a high above the key 13,000 level, the Dow gave back some ground, closing down 1.74 points or less than a tenth of a percent at 12,982.95. Meanwhile, the NASDAQ rose 6.77 points or 0.2 percent to 2,963.75 and the S&P 500 climbed 2.25 points or 0.2 percent to 1,365.74. Despite the mixed performance on the day, the major averages all posted modest gains for the week. The NASDAQ advanced by 0.4 percent, while the Dow and the S&P 500 both rose by 0.3 percent.

In economic news, new mortgage loans drawn down in Hong Kong decreased at a sharply faster rate in January, the Hong Kong Monetary Authority said on Friday. New mortgage loans drawn down decreased 31.6 percent from the previous month to HK$6.08 billion in January, markedly faster than the 15.8 percent fall in December. At the same time, the value of new loans approved during the month dropped 3.8 percent month-on-month to HK$9.97 billion, after falling 12.8 percent in the previous month.

by RTT Staff Writer

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