The Hong Kong stock market has finished lower now in two straight sessions, shedding almost 140 points or 0.7 percent in the process. The Hang Seng Index finished just above the 20,560-point plateau, and now analysts are forecasting a firm open for the market on Wednesday.
The global forecast for the Asian markets is broadly positive, thanks to encouraging signs of health for the global economy. The International Monetary Fund raised its global growth projections for this year and next, citing improvements in the U.S. economy and emerging economies. Also positive was Tuesday's successful Spanish debt auction, in which Spain sold 3.2 billion euros worth of twelve and eighteen-month bills. The European and U.S. markets finished sharply higher and the Asian bourses are expected to follow suit.
The Hang Seng finished modestly lower on Tuesday, nudged into the red by weakness from the resource plays.
For the day, the index lost 48.33 points or 0.23 percent to finish at 20,562.31 after trading between 20,392.57 and 20,678.04 on volume of 48.54 billion Hong Kong dollars.
Among the decliners, SouthGobi Resources plunged 10.0 percent, while Zijin Mining shed 1.6 percent, Ningbao Gold lost 1.1 percent, Jiangxi Copper fell 1.6 percent and Chalco declined 1.6 percent.
The lead from Wall Street is upbeat as stocks moved sharply higher on Tuesday as traders reacted positively to news out of Europe and the latest batch of quarterly results.
The rally followed a successful Spanish debt auction. Spain sold 3.2 billion euros worth of twelve and eighteen-month bills, above the target of 3 billion euros. While the yields were well above last month, the auctions attracted improved demand. The results of the bond auctions contributed to a drop in Spanish bond yields and offset some of the recently renewed concerns about the European debt crisis.
Upbeat earnings news also generated positive sentiment, with shares of Coca-Cola (KO) rising by 2.1 percent after the beverage giant reported first quarter earnings that rose to $0.89 per share from $0.82 per share in the same quarter a year ago, beating estimates for $0.87 per share.
Goldman Sachs (GS) also reported better than expected first quarter earnings and announced an increase in its quarterly dividend to $0.46 per share. While Johnson & Johnson (JNJ) also reported stronger than expected earnings growth, the healthcare giant reported a modest drop in sales.
Meanwhile, traders largely shrugged off disappointing U.S. economic data, including a Commerce Department report showing that housing starts fell 5.8 percent to an annual rate of 654,000 in March from the revised February estimate of 694,000. Economists had expected starts to rise to an annual rate of 700,000.
Also, the Commerce Department said building permits rose 4.5 percent to an annual rate of 747,000 in March from the revised February rate of 715,000. With the increase, building permits rose to their highest level since September of 2008. A separate report from the Federal Reserve showed that industrial production unexpectedly came in unchanged for the second consecutive month in March.
The major averages moved roughly sideways going into the close, ending the session near their best levels of the day. The Dow jumped 194.13 points or 1.5 percent to finish at 13,115.54, while the NASDAQ soared 54.42 points or 1.8 percent to end at 3,042.82 and the S&P 500 surged 21.21 points or 1.6 percent to 1,390.78.
In economic news, foreign direct investment into China declined for the fifth month in a row in March, the Ministry of Commerce said on Tuesday. China attracted $11.76 billion investment in March, down 6.1 percent from a year ago. In the first quarter, FDI decreased 2.8 percent annually to $29.5 billion.
According to U.S. Treasury Department data, China's holding of U.S. debt increased for the second consecutive month in February. Holdings of China, the largest buyer of U.S. government debt, totaled $1.18 trillion.
by RTT Staff Writer
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