The Hong Kong stock market has finished higher now in two straight sessions, rising more than 460 points or 2.1 percent along the way. The Hang Seng Index settled just above the 21,680-point plateau, and now traders figure to take profit when the market kicks off trade on Thursday.
The global forecast for the Asian markets suggests mild consolidation, with investors likely to lock in gains after stocks rallied earlier in the week - particularly among the gold and technology stocks. Remarks by U.S. Federal Reserve Chairman Ben Bernanke add to the cautious sentiment as the Fed chief refrained from discussing further quantitative easing while testifying before the House Financial Services Committee. The European and U.S. markets finished with mild losses, and the Asian markets are expected to follow suit.
The Hang Seng finished modestly higher on Wednesday following gains from the airlines and automobile producers.
For the day, the index collected 111.35 points or 0.52 percent to finish at 21,680.08 after trading between 21,525.91 and 21,716.76 on volume of 70.88 billion Hong Kong dollars.
Among the gainers, Cathay Pacific climbed 3.5 percent, while Air China jumped 1.9 percent, China Eastern spiked 1.7 percent and BYD surged 2.4 percent.
The lead from Wall Street is negative as stocks showed a lack of direction for much of Wednesday before falling in late day trading and closing firmly in the red. The pullback by the markets was partly due to profit taking, with traders cashing in on recent strength amid ongoing questions about whether the global economic outlook supports the latest upward move.
Selling pressure was also generated by Bernanke's testimony before the House Financial Services Committee, as the Fed chief refrained from discussing further quantitative easing despite acknowledging that the pace of the U.S. economic expansion has been uneven and modest by historical standards. Bernanke also warned of lingering weakness in the labor market.
Traders largely shrugged off the release of a report from the Commerce Department showing that the U.S. economy expanded at an annual rate of 3.0 percent in the fourth quarter, reflecting an upward revision from the 2.8 percent growth that was initially estimated. The upward revision surprised economists, who had expected GDP growth to be unrevised.
A separate report from the Institute for Supply Management - Chicago showed that business activity in the Chicago-area expanded faster than expected in February. The ISM Chicago said its Chicago business barometer jumped to 64.0 in February from 60.2 in January, with a reading above 50 indicating an expansion. Economists had been expecting a reading of 61.0.
The major averages all ended the day in negative territory, with the Dow pulling back below the 13,000 level. The Dow fell 53.05 points or 0.4 percent to finish at 12,952.07, while the NASDAQ slid 19.87 points or 0.7 percent to 2,966.89 and the S&P 500 dropped 6.50 points or 0.5 percent to 1,365.68.
In economic news, Hong Kong will on Thursday release January figures for retail sales. By value, sales are expected to jump 24 percent on year following the 23.4 percent gain in December. By volume, sales are called higher by 16.8 percent following the 17.1 percent increase in the previous month.
Also, China will on Thursday provide February results for its manufacturing PMI and the HSBC manufacturing PMI. The manufacturing PMI is expected to show a score of 50.8, up from 50.5 in January. The HSBC PMI saw a score of 48.8 in the previous month.
by RTT Staff Writer
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